Payday super went live on 1 July. Super is now due every time you run payroll, landing in your employees' fund within seven business days, and there's no transition period.
Here's the part catching people out: if you were paying super quarterly and timing it to the deadline, your June quarter super is still due by 28 July under the old rules. So this month you're paying both, close to double the usual super outlay.
The June quarter BAS is due 28 July as well.
And from 1 July, the general interest charge on unpaid tax debt rose to 11.43% per annum, compounding daily. It stopped being tax deductible a year ago. On a $100,000 debt, that's roughly $12,000 a year with nothing to claim back.
I know what happens next, because we're already seeing it. A business hits a month like this and someone quietly does triage. Wages get paid. Super gets paid, because the ATO now sees it through payroll reporting almost as it happens. And the BAS slides. Just this once.
I understand the logic. For a long time it genuinely made sense, and plenty of businesses used it deliberately, often with their accountant's blessing.
The ATO was the slowest creditor to chase and the interest was deductible, so the tax account became the informal overdraft of Australian small business.
That era is over, and it's worth being fair about why. Collectable debt across the tax system sits at $54.6Bat the last official count, around two-thirds of it owed by small business.
The ATO has been open that pulling that figure down is the priority, and every change of the past two years serves that one goal: stopping debt building up unseen.
In the long run, most businesses will be better for it, with no quarter-end shocks, cleaner books and no ugly surprise when you refinance or sell.
But right now we're in the transition, and transitions are hardest on businesses that entered them already stretched. You can see the strain in the numbers: complaints to the Tax Ombudsman jumped 127% this financial year, mostly about debt collection, penalties and interest. The long-term benefit doesn't pay this month's bills.
Meanwhile, the practical reality is that the ATO now moves like a commercial creditor. Follow-up that once took months arrives in weeks, Director Penalty Notices are issued earlier, and once one lands, the company's debt can become yours personally. Letting the BAS slide in July means borrowing at the worst rate available, from the creditor most likely to escalate.
So what should you do if July's numbers genuinely don't work?
Treat it as a negotiation. The ATO still does deals with businesses that come early with a credible position, and a properly negotiated payment plan built around your actual cash cycle can run as long as three years.
Timing matters most: get in before a payment is missed, not after, because that's when there's real room to move. In many of the tax debt positions we see, interest and penalties make up 20 to 70% of the total owing, and that portion can often be wound back where the case supports it.
And don't go it alone. The moment tax debt enters the conversation is the moment to talk to someone who deals with the ATO every day.
That first conversation often costs nothing. Most specialists, ours included, will talk through your position obligation free, and having it early can change how the next six months go.
What catches too many good businesses is assuming the stakes are lower than they are while the consequences quietly stack: a missed payment becomes a default, a default becomes a notice, a notice becomes a personal liability. That snowball rolls over thousands of businesses every year.
Don't let yours be one of them. Deal with it while it's still a cashflow problem.
Tax Debt Matters is a monthly column written by Michael Moon, Director at Tax Assure, specialists in negotiating tax debt with the ATO. If tax debt is part of your world right now, talk to us. The first conversation is obligation free. 1300 952 295 | www.taxassure.com.au
