ATO’s New GST Rule: Non-Compliant Small Businesses Must Report Monthly

Starting April 1, 2025, the Australian Taxation Office (ATO) will require some small businesses to report and pay Goods and Services Tax (GST) monthly instead of quarterly. This change affects businesses that have had trouble meeting their GST obligations, such as:

• Missing GST payments
• Lodging Business Activity Statements (BAS) late
• Making frequent errors in GST reporting

If your business is impacted, here’s what you need to know about this major ATO GST update and how to prepare.

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Why is the ATO Changing GST Reporting Rules?

The ATO wants to help small businesses stay on top of their tax obligations and reduce compliance issues. By shifting non-compliant businesses to monthly GST reporting, the ATO aims to:

• Encourage better financial management.
• Improve cash flow tracking.
• Make tax payments smaller and easier to manage.
• Reduce errors by aligning reporting with business processes.

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Who Will Be Affected by Monthly GST Reporting?

This change does NOT affect all small businesses. It only applies to businesses that:

• Have a history of late BAS lodgments.‍
• Have missed GST payments in the past.
• Have made frequent mistakes in their tax reporting.

Certain industries may see a higher impact, including:

• Contractors and freelancers
• Ride-share drivers (e.g., Uber, DiDi)
• Small retail businesses
• Sole traders and self-employed professionals

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How Will This Impact Small Businesses?

For businesses required to switch to monthly GST reporting, there are some key challenges:

• Increased admin work – You’ll need to lodge BAS every month instead of every three months.
• More frequent tax payments – You’ll need to budget for monthly GST payments.
• Possible extra costs – Some businesses may need help from an accountant more often.

However, there are also potential benefits:

• Better cash flow management – Paying in smaller amounts each month is easier than handling a large quarterly bill.
• More accurate tax reporting – Businesses can correct errors sooner, reducing the risk of ATO penalties.
• Stronger financial discipline – Monthly reporting forces businesses to stay updated on their accounts.

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What Should Small Businesses Do Now?

If you think your business might be affected by ATO’s monthly GST changes, here’s what you should do:

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1. Check if You’re Impacted

The ATO will notify affected businesses directly. Keep an eye on your MyGov account or your registered tax agent’s communication.

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2. Automate GST Reporting with Myaccountant

If your business is new to accounting software or you're not tech-savvy, now is the perfect time to switch to a simple and affordable accounting solution like Myaccountant.

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Why choose Myaccountant?

1. ‍ATO-certified for direct GST lodgement – No need to submit BAS manually, saving you time.
2. Easy to use – Perfect for first-time software users.
3. Affordable – No hidden fees, ideal for micro to small business owners.
4. GST-ready – Automatically calculates and tracks GST for monthly reporting.
5. Built for small businesses – No unnecessary complexity, just what you need to stay compliant

Instead of manually lodging BAS through the ATO portal, Myaccountant allows you to lodge your GST returns directly with the ATO, making monthly reporting faster, easier, and more efficient.

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3. Adjust Your Cash Flow Plan

Since you’ll be paying GST monthly, review your finances and ensure you have enough funds set aside.

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4. Get Professional Tax Advice

‍Talk to your accountant or tax advisor to understand how this change affects your business and ensure compliance.

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Final Thoughts

The ATO’s new GST rule for non-compliant businesses is a significant change for small business owners in Australia. While it may require more frequent reporting, it also provides an opportunity to improve financial habits and avoid future tax penalties.

With Myaccountant’s ATO-certified direct GST lodgement, you can automate your BAS lodgements, reduce admin time, and focus on growing your business.

If you’re unsure whether your business is affected, reach out to a tax professional and start preparing for the transition.

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