ATO debts have become more expensive to carry, while changes to super payments are putting further pressure on cash flow. This sponsored post looks at what Canberra businesses can do.

Canberra runs on small business.

More than 33,900 small businesses operate across the ACT, from cafes in Civic to trades in Fyshwick and practices in Gungahlin. Yet for a growing number of owners, one bill keeps landing at the top of the pile: the tax debt.

Rising costs, slower customer payments, and a string of rule changes have left plenty of local operators behind on their obligations. At the same time, the Australian Taxation Office has taken a firmer line on overdue amounts, and payment plans are no longer the easy fallback many owners once relied on.

Why tax debts are harder to carry

Several changes have made falling behind more expensive. Since 1 July 2025, the general interest charge applied to overdue tax is no longer tax-deductible, a shift CityNews columnists warned would hit struggling small businesses hardest. Interest now compounds daily with no offset at tax time.

Payday Super has added a second squeeze. From 1 July 2026, employers must pay superannuation alongside wages instead of quarterly, removing a cash buffer many businesses used to smooth out lean months. Late super quickly becomes a Superannuation Guarantee Charge owed to the ATO, complete with penalties.

What happens when debts go unaddressed

Ignoring a tax debt rarely makes it disappear. Over time, the ATO can:

1. Add daily compounding interest charges
2. Issue garnishee notices directing banks or customers to pay the ATO directly
3. Send director penalty notices, making directors personally liable for certain company debts
4. Report significant debts to credit reporting bureaus

Each step narrows the options available to a business, which is why acting early matters so much.

Practical steps for Canberra owners

Owners facing a growing tax bill have more choices than they might think. Consider working through these in order:

1. Contact the ATO early. Engaging before debts escalate usually leads to better outcomes and more flexible arrangements.
2. Bring in your accountant or registered tax agent. Professionals can negotiate on your behalf and check whether lodgements are complete.
3. Tighten cash flow. Chase overdue invoices, review payment terms with customers, and trim non-essential spending.
4. Look at refinancing options. Owners with equity in commercial or residential property sometimes turn to a high quality non-bank option, and private lending with Secured Lending is one example of a short-term, property-secured business loan used to clear ATO debts before penalties escalate. Facilities like this start from $250,000, so they suit larger debts rather than smaller shortfalls.
5. Seek free support. Financial counselling services for small business can help owners understand where they stand without cost.

Weighing up a refinance

Replacing a tax debt with a loan only makes sense when the numbers work. Private lending costs more than bank finance, and the property offered as security is genuinely at risk. Before committing, owners should confirm how the loan will be repaid, request every fee in writing, and get independent advice from an accountant.

The bottom line

Tax debts tend to grow quietly until they suddenly become urgent. For Canberra’s small business community, the message is simple: deal with it early, get good advice, and explore every option while there is still time to choose the best one.

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