ATO's Consecutive Increase In General Interest Rates Spells Trouble for Late Tax Payments
- Arnold Shields
- May 3, 2024
- 2 min read
Updated: May 13
The Australian Taxation Office (ATO) has just pushed interest rates to levels not seen since the Global Financial Crisis. For individuals and businesses alike, this signals a serious shift in how tax debt is treated.
Feeling unsure about what this means for you? You’re not alone, and we’re here to help make sense of it.
Understanding the GIC and SIC
Let’s break down what these charges are:
General Interest Charge (GIC)
This applies to late payments on a range of taxes: income tax, GST, FBT, PAYG, and even excessive shortfalls from incorrectly varied instalments. It’s calculated daily and based on the Reserve Bank of Australia’s 90-day Bank Accepted Bill rate + 7%.
Shortfall Interest Charge (SIC)
The SIC is used when the ATO amends an income tax assessment. It's calculated daily (using the same 90-day rate + 3%) and applies from the original due date to the day before the amendment notice is issued.
What’s Changed? The Numbers You Need to Know
The ATO has increased both GIC and SIC rates eight quarters in a row:
GIC: Now sits at 11.15%
SIC: Climbed to 7.15%
These are the highest we've seen since the fallout from the GFC in 2012. If you’re late paying or your tax estimates are off, this could cost you significantly more.
How This Impacts You
For taxpayers, this rate hike is more than a statistic—it’s a direct financial hit. Here’s how:
Late payments are now significantly more expensive.
Underpaid instalments attract daily compounding interest.
Tax debt left unattended can quickly balloon out of control.
In short: even a short delay in payment or a miscalculation could now cost thousands more in interest.
Is There Any Relief?
Yes. You can apply for GIC remission if:
The delay was due to external factors like illness, natural disasters, or collapse of a major debtor, and you acted quickly to fix the issue.
You were responsible for the delay but acted reasonably to resolve it.
Paying the full amount would cause serious financial hardship.
Each case is assessed on its own merits, so don’t wait to apply.
What You Should Do Now
Stay on top of your payments, automate where possible.
Review tax estimates regularly to avoid underpayment.
Keep accurate records to justify any remission applications.
Talk to a professional advisor about your specific situation.
Need Help? We’re Here for You
Navigating rising tax interest rates doesn’t have to be stressful. At Dolman Bateman, we can help you:
Review and manage your tax obligations
Apply for GIC remissions
Avoid future penalties with proactive strategies
📞 Call us on 02 9411 5422 or book a meeting below for expert support today.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
