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minimise repayments by refinancing your tax debt

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As the financial year comes to a close, many businesses are busy finalising their financial statements and tax returns for the previous year.  For those who have had a big year, this often means facing a substantial tax bill. 

If you were not prepared for such a tax bill, this very quickly becomes a large debt that can add to the day-to-day stress of operating a business.

A large tax debt with the Australian Tax Office (ATO) can be daunting, but there is another way.

Refinancing your tax debt can help you to minimise the monthly repayments you are required to make, helping you to improve cashflow and your overall financial situation.

The challenge of a big tax bill

For self-employed professionals, receiving a hefty tax bill is all too common.  While it can be a sign of financial success, it can also create significant challenges.  The ATO offers payment plans, but these can be quite steep and inflexible.

For instance, a $40,000 tax debt with the ATO might require monthly payments of around $3,500 over a maximum 12-month period.  High monthly payments like this can put a strain on your finances, and impact your ability to manage other expenses, or grow your business.

Refinancing:  a smart solution

Choosing to refinance your tax debt can be a game-changer.  By converting your personal tax debt into a personal loan, you can secure more favourable and flexible payment terms.  For example, instead of needing to make a $3,500 payment each month to the ATO, refinancing could reduce your payments to just $700 a month over a 7-year period. 

This approach not only makes your monthly payments more manageable, but it also provides greater flexibility.  These personal loans come without the pressure of a flexible payout clauses, generally with no early payout fees or interest penalties, so you can pay it off at your discretion!

The benefits of refinancing your tax debt

If you’re still wondering whether you should or not, here are the top 4 reasons you should consider refinancing your tax debt:


  • Lower Monthly Payments – By refinancing, you can reduce the minimum amount you need to pay each month to something more manageable. This can free up cash in your business for other important expenses or growth opportunities, and allow you to operate without stress.
  • Flexible Payment Terms – Personal loans typically offer more flexible payment terms compared to what the ATO are prepared to offer. This flexibility allows you to better manage your finances, and avoid defaulting on payments which can cause even bigger headaches in future for lending/growing your business.
  • Better Cashflow – Lower monthly payments can improve cashflow, making it easier to handle everyday expenses and those unforeseen financial challenges that tend to pop up when we least expect them.
  • Easier home loan refinancing – A substantial tax debt with the ATO can make it challenging to refinance your home loan. Personal loans however are looked upon more favourably and can be refinanced back into a mortgage with much more ease.

The benefits of refinancing your tax debt

If you’d like to look at refinancing your tax debt, Alegra Financial Solutions can help.

While facing a large tax debt may feel overwhelming, there are practical solutions available to you.  Firstly, we start with a personalised assessment.  We’ll look at your financial situation and tax debt.

Then we look at our network of over 50 lenders to find the best refinancing option for your situation.  It’s not just about the lowest rate, it’s about the most favourable terms overall.

If you’d like help, please get in touch with us today.