Just over a week after announcing it would stop accepting credit card payments from 30 November 2026, the ATO has reversed course. Credit card payments for tax debts will now continue to be accepted until 30 June 2027.

The change was confirmed in a Treasury statement on 9 October 2026, following the federal government’s decision to provide transitional funding to cover the roughly $200 million in annual costs the ATO had cited as its reason for ending the option in the first place.

What’s changed

The ATO’s original announcement on 1 October 2026 set a 30 November 2026 cutoff for credit card payments. That decision drew strong pushback from the accounting profession and small business community, with many pointing out the lack of consultation before the change was announced.

In its Friday statement, Treasury said:

“The Government will provide transitional funding so the ATO can continue accepting credit card transactions until the end of the financial year, with costs to be finalised in MYEFO.”

“This will provide more time for the ATO to engage with small business and other taxpayers who currently rely on credit cards, provide more detailed information to those affected, and consult on targeted options to support impacted taxpayers.”

The ATO will also continue negotiations with credit card companies on lowering processing rates.

Why the reversal matters for small businesses

For many Australian small businesses, credit card payments to the ATO function as short-term cash flow management — effectively providing 30 to 55 days of additional float on tax obligations. Removing the option would have forced businesses to find other cash flow solutions quickly, often at higher cost.

Industry voices had been vocal about the impact. Independent MP Allegra Spender described the extension as “a welcome step, but not the end of the issue.” Accountant Joe Kaleb questioned why the small business impact wasn’t properly considered before the original announcement.

Belinda Raso, founder of Tax Direct Accounting, told Accountants Daily she was “horrified” by the original decision, noting that credit card payments on GST and BAS have become commonplace cash flow management for many small businesses. She warned that eventually removing the option without proper transition support could lead to business closures and reduced employment.

What businesses should do now

Even with the extension, 30 June 2027 is firm as the current cutoff. Businesses using credit cards for ATO payments as part of their cash flow management should use this additional time to:

• Review your current ATO payment arrangements — including any direct debit setups linked to credit cards
• Plan alternative cash flow options before mid-2027 — including bank line of credit, ATO payment plans, or improved working capital management
• Watch for further ATO consultation — Treasury has committed to engaging with affected taxpayers, and the final approach may evolve

If you’ve been using credit card payments as a cash flow lever rather than a necessity, this is the moment to build better forecasting into your business so the eventual transition doesn’t hit cash flow unexpectedly.

For context on the earlier announcement, see our previous post on the ATO’s original credit card decision.

Need help planning your ATO payment setup?

If credit cards have been part of how you manage BAS and tax payments, now is the time to put a cleaner strategy in place before 30 June 2027.

Our team can help you review your current setup, model cash flow scenarios, and structure a plan that works regardless of what happens with payment options at the ATO.

Disclaimer: This article is general information only and does not constitute financial, tax, or legal advice. For advice specific to your circumstances, please contact your Accountant.