Close up of a laptop sitting on a grey couch with the screen open and a financial statement on the screen

Managing Tax Obligations & Cash Flow for Your Business in 2025

For many businesses, the start of the year is an opportunity to review your financial strategies and plan for sustainable growth.

ATO Tightens Its Stance on Tax Debts

One key area you shouldn’t overlook is your tax obligations, especially with the Australian Taxation Office (ATO) shifting to a more active enforcement stance.

In recent years, the ATO has been more flexible with businesses facing challenges due to COVID-19.

However, that leniency period has ended, and the ‘gloves are off’.

The ATO is now taking a firmer approach to outstanding tax debts, focusing on businesses behind in tax payments and employee superannuation.

For business owners and directors, ignoring or delaying the issue is no longer an option.

Why This Matters for Your Business

Rising interest costs – The ATO charges 11.36% interest on overdue tax debts, making it critical to avoid compounding liabilities that can significantly impact cash flow..
Director penalty notices & debt recovery – The ATO has resumed director penalty notices and garnishee actions, which could result in personal penalties for directors if action is not taken.
Superannuation compliance – Businesses that delay employee superannuation guarantee (SG) payments risk significant penalties, including loss of deductibility and potential legal action.
Tax deductibility of ATO interest charges is changing – At the moment, some ATO interest charges are tax deductible, but as of 1 July 2025, this will no longer be the case. The government has announced plans to amend tax laws to deny deductions for ATO interest charges, making it even more important to stay on top of payments.
Reputational and operational risk – Unmanaged tax debt can affect business credit ratings, supplier relationships, and operational stability, making it harder to secure financing in the future.

The Good News – Proactive Steps to Take

The good news is that the ATO is willing to work with businesses that engage early and demonstrate a genuine commitment to managing their obligations.

Here’s what you can do now:

Engage the ATO early – If your business has outstanding tax debts, don’t bury your head in the sand. Contact the ATO to discuss a manageable payment plan.
Review your cash flow – Ensure your business has a sustainable cash flow strategy to meet its tax obligations on time.
Explore Finance Solutions – Beyond traditional overdrafts, working capital solutions are available to help businesses bring ATO arrears up to date and avoid costly penalties.

At Ledge Finance, we assist businesses in navigating cash flow challenges, including structuring finance solutions to ease tax burdens. If your business needs support in managing obligations while keeping growth on track, get in touch with our team.

Contact us today to explore tailored finance and debt advisory solutions for your business.

Please note that the information provided here is general and does not constitute financial, tax, or other professional advice. You should consider whether the information is appropriate for your needs and seek professional advice before making any decisions.

View Business and Finance

Instant Asset Write-Off Ending – Time to Act Before 30 June 30 2025

The $20,000 Instant Asset Write-Off: What You Need to Know The clock is ticking for small businesses wanting to take advantage of the $20,000 Instant Asset Write-Off, with the scheme set to end on 30 June 2025. Despite speculation, this year’s Federal Budget did not include an extension, meaning businesses now have a clear deadline. If no further changes are announced, the threshold will drop back to $1,000 in the next financial year, significantly limiting tax deductions for asset purchases. For businesses considering equipment, vehicles, or other asset investments, now could be the time to act – especially with end-of-financial-year...

Nell Gray and Ledge Finance teams standing in front of Uniform Concepts building

Nell Gray’s Uniform Business Goes from Strength to Strength

Nell Gray, a family-owned and operated business, has been synonymous with uniforms for over seven decades. Over that time, the company has evolved into a leading manufacturer within the textile and clothing industry, with key employees of Nell Gray establishing Uniform Concepts in 2007 after identifying a need for a retail solution for school uniforms. Adapting to Changing Market Demands In 2011, Tuan Nguyen acquired Nell Gray and Uniform Concepts. Since then, the two companies have expanded their reach even further, most recently beyond WA’s borders for the first time. Some 170 schools and colleges are currently supplied with uniforms,...

What is a PPSR Check? Everything Businesses Need to Know About PPSR

The Personal Property Securities Register (PPSR) is an important tool for Australian businesses. It allows businesses to secure their interests in personal property and protect themselves against financial risk – for example, in the event of a customer default or insolvency. Let’s explore how PPSR checks work, how they safeguard your assets, and why they should form a key component of your financial and legal strategy. What is the PPSR? The Personal Property Securities Register (PPSR) is an online register in Australia that allows businesses and individuals to register, search and manage security interests in personal property. Personal property refers...

Clean Energy Australia and Ledge Finance teams standing in front of a white Clean Energy tanker in a warehouse

CEFA offers a pipeline to the future

Clean Energy Fuels Australia (CEFA) may have been around for over a decade, but it’s only in the last four years that their ambitions to supply Liquefied Natural Gas (LNG) to remote mine sites have hit the headlines. With three founding members – Basil Lenzo, Gary Ireson and David Trembecki – and a combined 80 years of energy industry experience under their belts, CEFA is focused on reducing the carbon footprint for off-grid, energy-intensive industries in Australia. With an ever-urgent requirement by many mid-tier operators to comply with stringent ESG demands, the services offered by CEFA are extremely prescient. Providing...

View more Insights

Please note the information provided on this page is general in nature and does not constitute financial, taxation or other professional advice. You should consider whether the information is appropriate for your needs and seek professional advice prior to making any decisions.