The Government spent years making tax debt more expensive. Now it's making it harder to pay.
Over the past few years, the direction of travel has been clear.
First, the Government removed the deductibility of ATO interest, significantly increasing the after-tax cost of carrying tax debt.
Businesses responded the way you'd expect. Many looked for alternative funding solutions. Credit cards became one of the few practical options, particularly when refinancing can be difficult once ATO debts and payment arrangements are already in place.
Then the RBA announced the end of card payment surcharges.
The consequence was predictable. If merchants could no longer recover card processing costs, someone would have to absorb them.
Last week, the ATO announced it will stop accepting credit card payments from 30 November 2026.
What many accountants and advisers find frustrating is that the RBA's decision was announced months ago. The ATO knew this change was coming, yet taxpayers have been given very little notice to adjust.
The sequence is hard to ignore:
• Make ATO interest non-deductible.
• Push businesses towards alternative funding options.
• Remove card surcharges.
• Remove the ability to pay the ATO by credit card.
The reality is that many SMEs carrying ATO debt are not avoiding their obligations. They're managing cash flow.
As funding options continue to narrow, it becomes even more important for businesses to access every legitimate tax concession available to them.
One of the most overlooked opportunities is the R&D Tax Incentive.
For eligible businesses developing new products, software, processes or technologies, an R&D claim can generate a substantial cash refund or tax offset, improving cash flow and helping reduce tax debt without taking on additional borrowing.
For many innovative businesses, the best solution to a tax debt isn't another financing product. It's identifying incentives they are already entitled to claim.
The question is whether these changes improve the integrity of the system, or simply make life harder for businesses already under cash flow pressure.
