Forum Discussion

Experienced Cover User

6 months ago

Solved

ATO Interest no longer claimable

Hello,

The ATO has stopped Interest from being claimable as 1st July 2025.

Wondering the best way to handle the interest which we would usually DR expense account and credit ATO integrated account each time it showed in the clients tax statement online.

Another way done was by doing a purchase order, allocated to interest expense until paid, along with BAS's as P/O.

If do as a journal where would you allocate it to, instead of the expense account, and still balance the ATO integrated account with the tax statement ?

thankyou

DuncanS
5 months ago
MOTIVATED Shella_A

I will be setting up a Other Expense Ledger called General Interest Charge ATO Non-Deductible.

Duncan

3 Replies

Julie_A_C
Ultimate Cover User
3 months ago
Hi Shella_A DuncanS MOTIVATED

As Duncan has said, allocate to Other expense. The Accountant will know it is ATO GIC if you state that in the account name. They will then record it as an add back in the tax return.

A lot of times the actual tax return is different to the Financials of the business, due to things being expenses but not being a tax deduction.

Naming the expense clearly also brings it to the attention of any prospective buyers and the seller, that it is an expense that the new owner may not actually have and therefore they will have a better profit margin.
DuncanS
Ultimate Partner
5 months ago
MOTIVATED Shella_A

I will be setting up a Other Expense Ledger called General Interest Charge ATO Non-Deductible.

Duncan
Shella_A
MYOB Moderator
6 months ago
Hi MOTIVATED,

Since the recent ATO changes can affect your reporting and the right way to account for interest after July 2025 will depend on your business' specific setup, it’s best to check in with your accountant. They’ll be able to give you the most accurate advice on how to record these entries to stay compliant and keep your accounts balanced.

Cheers,

Shella