ATO credit card ban delay: what it means for small business margin

Not tax advice. This piece explains what has been announced and what has been legislated. It is general information only, and your accountant or registered tax agent is the right person to tell you what any of it means for your business.

What happened, and when?

The Australian Taxation Office met small business groups on 30 September to foreshadow a public announcement the following day: it would stop accepting credit cards for tax payments, with the ban to start on 1 December. The change followed the Reserve Bank’s decision to ban card surcharges. Over the following week the pressure built. The Small Business Minister, Anne Aly, said businesses “should have been consulted”, the Australian Chamber of Commerce and Industry’s Andrew McKellar called for “political leadership”, and the independents Kate Chaney and Allegra Spender asked for a longer runway or a workable solution, as the ABC reported on 8 October. COSBOA’s chief executive, Skye Cappuccio, warned that the change came while many businesses were managing “high costs, tight margins and competing financial obligations”, and asked the ATO to move quickly on New Payments Platform options (COSBOA).

On 9 October the Treasurer, Jim Chalmers, in a joint release with Anne Aly and the Assistant Treasurer, Daniel Mulino, said the government would provide transitional funding so the ATO can keep accepting credit card payments until the end of the financial year, 30 June 2027, with the costs to be finalised in MYEFO. The ATO has also been asked to consult on support for people in financial hardship and on alternatives for those who cannot pay another way. After 30 June 2027, the release says, the ATO will still accept credit cards through third-party providers, alongside free and low-fee methods such as debit card and bank transfer (Treasurer’s release, 9 October 2026). The ban was delayed, not reversed, and the transitional funding is confirmed.

Why does it matter to a small business?

For the businesses that use it, a credit card is a cash flow tool rather than a convenience. The Treasurer’s release says about five per cent of small businesses, and just over two per cent of individuals, paid the ATO by credit card in 2024–25 (Treasury). COSBOA’s chair, Matthew Addison, cites an estimated $2 billion in ATO payments made by credit card; that figure is COSBOA’s estimate. COSBOA also argues that banning surcharges without first ensuring lower merchant fees are passed through simply shifts those costs onto businesses already working on tight margins (COSBOA). That is COSBOA’s position, not a settled finding, but it is the part of the story most owners will feel, because it applies to every card payment a business accepts, not only the tax bill.

What sits around it in the tax package?

The delay lands on top of the May Budget measures. According to the Budget small business factsheet, the $20,000 instant asset write-off is permanent from 1 July 2026 for businesses with turnover under $10 million, and companies with turnover of up to $1 billion can use current-year losses to claim a refund of tax paid in the prior two income years, which the factsheet says will benefit around 85,000 companies. It also lists refunds for small start-ups in their first two years from 2028–29, and the option for small businesses to opt in to monthly pay as you go reporting and payment from 1 July 2027.

On 18 June the Prime Minister and the Treasurer announced that the turnover threshold for the small business 50 per cent active asset CGT reduction would rise from $2 million to $10 million, which they said would make all 2.7 million active small businesses eligible, and put the business measures in the package at over $3.8 billion (PM and Treasurer, 18 June 2026). The write-off and loss carry-back are now law: the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 received Royal Assent on 26 August 2026 and became the Treasury Laws Amendment (Tax Reform No. 2) Act 2026, No. 71 of 2026 (Federal Register of Legislation; Parliament of Australia). Whether and how any of this applies to you depends on your structure, turnover and timing, which is a conversation for your accountant.

What is still uncertain?

The transitional funding is settled; the shape of what follows it is not. The ATO is still consulting on hardship support and on alternatives for those who cannot use other methods, the fees charged by third-party card providers after June 2027 are not set by the ATO, and the timing of New Payments Platform options is something COSBOA is still asking for. The monthly instalment option is a measure announced for 1 July 2027, and its detail is still to come. None of these is a reason to act today, but each is a date worth putting in the diary.

Which costs can you actually control?

The lesson is less about credit cards than about how quickly a cost assumption can change. A payment option many owners relied on was scheduled for removal and then given a longer runway within eight days of being announced. You cannot plan around Canberra’s calendar, but you can know which of your own costs are fixed, which flex, and which you are simply in the habit of paying. Marketing is often the first line cut when cash gets tight, and it is also one of the few that can be made leaner without going quiet, because so much of it is repeat work: the same kinds of posts, emails and reports produced on a rhythm.

How do you do more with less without losing control?

The principle we work to is simple: humans approve, agents run the repeat work. A person decides what the business says and signs off on every message before it goes out, and the drafting and scheduling that fill the week are handled in the background. That keeps the judgement, and the accountability, with the owner, which matters most when the rules around you are moving.

Where do you start?

Start by listing the marketing tasks you repeat every week or month and how long each one takes. Then decide who has to approve what before it is published, and write that rule down so it holds when you are busy. Finally, look at what you spend on marketing against the enquiries it brings in, so that the next time a cost shifts you know which work to protect. And for anything touching tax, payment plans or the new concessions, talk to your accountant first.