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The Australian Taxation Office (ATO) has announced that, starting from 1 April 2025, it will be shifting approximately 3,500 small businesses with a history of late or incorrect reporting, non-lodgment, or non-payment from quarterly to monthly GST reporting. This change aims to improve compliance.

Adopting a monthly reporting and payment cycle will help small businesses stay on top of their tax obligations and remain financially viable. Those who report monthly will be better positioned to address past tax issues in a structured manner, reducing the risk of falling further behind.

The ATO will inform small businesses and their tax professionals when their GST reporting cycle changes from quarterly to monthly.

This move is part of the ATO’s efforts to enhance GST compliance and foster positive business habits. The adjusted reporting cycles will stay in effect for at least 12 months as part of the ATO’s ‘Getting it Right’ campaign.

Small businesses that have voluntarily switched to monthly GST reporting have reported better cash flow management and an easier time meeting their obligations through smaller, more manageable payments. For many, monthly reporting aligns better with their reconciliation processes, increasing efficiency and saving time.

Small businesses struggling to meet their tax obligations should not ignore the issue but take action early by seeking assistance from their registered tax professional, a business adviser, or the ATO.

Quotes from ATO Deputy Commissioner Will Day:

“Running a small business is serious business, so it’s important to stay on top of your tax obligations. We know that moving from quarterly to monthly GST reporting helps reduce the risk of falling behind.”

“We understand that most small businesses want to do the right thing. Our goal is to help small business owners meet their tax and superannuation obligations by being transparent about the areas we’re focusing on.”

“The ATO has a responsibility to ensure fair competition and compliance, so small business owners can expect us to level the playing field.”

“We take our role seriously, and we are committed to helping viable small businesses comply with their ATO obligations, while also taking firmer action against those who deliberately fail to comply to ensure they don’t gain an unfair advantage.”

“If you’re a small business deliberately ignoring your obligations, you can expect the ATO to move you to more frequent GST reporting.”

As part of the ‘Getting it Right’ campaign, the ATO is also focusing this quarter on:

• Contractors in the building and construction, cleaning, courier and road freight, IT, and security industries who may be omitting income.
• Compliance regarding small business boost measures, including the small business skills and training boost and the small business technology investment boost.

Small businesses that believe they have no history of poor compliance and should remain on their current reporting cycle can apply for a review.

The ATO will continue to publish quarterly updates on new focus areas to ensure all small businesses have an equal chance of success.