It makes you unbankable at a handful of large lenders — which is a very different thing. For many self-employed Australians a tax debt can be refinanced and paid out, ending the payment plan and leaving one repayment instead of two.
Stops enforcement action, gives you a fixed monthly figure and shows the ATO you're engaging. Keep to it and that history genuinely helps you later.
Interest keeps accruing — and since 1 July 2025 it's no longer tax deductible. It doesn't free your cashflow, and at most big lenders an active tax debt is still a stop sign. The debt blocks the finance; the lack of finance keeps the debt alive.
The big one. If you own property with usable equity, you have something to refinance against. Broadly, the more equity, the more options and the better the pricing. Little equity makes it harder — not always impossible, but I'd rather tell you that on day one.
Lenders want evidence the business works now, not two financial years ago. Recent BAS, current bank statements and a short accountant's letter on this year's performance do more than an old tax return.
A $40,000 debt in a business turning over $500,000 reads very differently to the same debt on $90,000 of turnover. The question being asked is simple: was this a cashflow timing problem, or a solvency one?
Have you kept the mortgage paid and honoured the plan you agreed to? Clean conduct on existing commitments is often what tips a marginal file over the line.
From 1 July 2025 the ATO's general interest charge stopped being tax deductible, so carrying a tax debt costs more after tax than it used to. How that applies to your return is one for your accountant — but it's worth asking.
The ATO may report business tax debts of $100,000 or more that are over 90 days overdue where the business isn't engaging. You get a 28-day notice first. Engaging early is what keeps this from ever arising.
Yes — where the loan is structured for it, the balance is settled with the ATO at settlement and the payment plan ends. You're left with one repayment.
No. Clearing it first is the assumption that costs people years. The debt is usually part of what we're solving, not a barrier to starting.
The first conversation doesn't touch it — nothing is lodged. What does hurt is applying at three or four banks to see who says yes.
Then we've only reset the clock. A payout works when it's paired with the boring fix: a separate tax account, money moved across every time you're paid, and a quarterly conversation with your accountant.
Twenty minutes, no paperwork, nothing lodged and nothing on your credit file. You'll leave knowing whether this is workable and what the next step is.
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