<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A new rule making outstanding tax debts more expensive to pay off has kicked in as the Australian Tax Office chases a record $50 billion in unpaid tax.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Since July, the 10.78 per cent interest rate on the ATO's two-year payment plans is no longer tax deductible.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This means people in the red may end up paying back more. </span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/rio-tinto-looking-to-cut-annual-sick-leave-down-from-45-to-12-days-for-iron-ore-workers/607a605a-f24e-4da1-aa2c-e39db8178cd0" rel="" target="_blank" title=""><strong><span>Rio Tinto moves to slash sick leave from 45 to 12 days for Pilbara workers</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But, there could be a small workaround for sole traders and small businesses. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"If they pay that debt off via a loan or an overdraft facility, the interest on that loan is still tax-deductible," Etax accountants group marketing and communications manager Ashley Debenham said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The ATO plans are simple, but people usually need to pay 10 per cent up front.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/tax-office-new-rule-making-it-more-expensive-to-pay-off-outstanding-tax-debt/2b65929e-6e96-49b9-90c1-2d27d4763a7b" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>According to Etax accountants, if an owner took out a business loan at 10 per cent to pay a $20,000 tax debt over two years, then they would be $676 better off because the interest is tax deductible.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/queensland-nankin-crash-samantha-fielder-family-tributes/0f3b0266-6332-4959-8c4b-53aeeee7452e" rel="" target="_blank" title=""><strong><span>Heartbroken mother remembers young woman killed in crash as 'soul of our family'</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>If sole traders and small businesses have outstanding activity statements and are not able to refinance, they could qualify for the ATO's 12-month interest-free plan.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>There are also 20 free tax clinics around the country for those on a low income and in hardship. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In serious situations, the ATO could be asked to wipe away the interest owed.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"There is the possibility that it can be written off, but you do need to show cause for that," Tax Clinic director Connie Vitale said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><span>The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.</span></em></div></div>