The Australian Taxation Office (ATO) is stepping up its compliance measures for small businesses that regularly fail to meet their tax obligations. As of 1 April 2025, some businesses will be required to switch from quarterly to monthly GST reporting if they have a poor compliance history.

Why the Change?

The ATO says the move is designed to help struggling businesses get back on track by aligning reporting with their regular reconciliation processes. More frequent reporting can:

  • Support better record-keeping
  • Improve cash flow management
  • Reduce the risk of falling behind on obligations

While the change may feel like extra administration, the ATO believes monthly reporting will ultimately save time and help businesses make more informed decisions.

Who Will Be Affected?

Since March 2025, businesses with a history of non-compliance will begin receiving written notifications of their new monthly reporting cycle. This will apply to businesses that have not responded to previous ATO reminders and demonstrate poor compliance, such as:

  • Paying late or not paying amounts due
  • Lodging late or failing to lodge at all
  • Reporting obligations incorrectly

The ATO has the power to enforce this change under the A New Tax System (Goods and Services Tax) Act 1999, paragraph 27-15(1)(c), if the Commissioner is satisfied that a business has a history of failing to comply.

What if You Disagree?

If you are notified of a change and believe it is unfair, you can:

  • Lodge an objection – this is a reviewable GST decision that can be challenged within the ATO’s time limits.
  • Demonstrate compliance – after 12 months of meeting obligations, you can request to move back to quarterly reporting.

Example: Jack’s Story

Jack runs a small business with turnover between $350,000 and $550,000 a year. Over the past 18 months, he stopped lodging BAS on time, fell behind on payments, and defaulted on ATO payment plans.

In March 2025, Jack received a letter from the ATO advising that he was being moved to monthly reporting from 1 April 2025. Initially, this felt like a setback, but it became a turning point. By keeping his records up to date and spreading payments across the year, Jack found it easier to manage cash flow and stay compliant. After 12 months, he chose to keep monthly reporting because it worked better for his business.

Voluntary Monthly Reporting

Not all businesses will be forced into monthly reporting—some are choosing it voluntarily. Many small businesses report that:

  • Monthly GST lodgements align more closely with other business processes
  • Smaller, more manageable payments improve cash flow
  • Staying up to date reduces the risk of falling behind

Example: Andrew and Sean, who run a community art business, moved voluntarily to monthly GST reporting on their accountant’s advice. They found it easier to manage obligations, avoid large quarterly payments, and make more informed business decisions.

How to Stay on Track

If you want to avoid being forced into monthly reporting:

  • Always lodge on time – even if you can’t pay in full, meeting lodgement deadlines shows compliance.
  • Engage with the ATO – if you’re struggling, set up a payment plan rather than ignoring reminders.
  • Use accounting tools – digital software and professional advice can help you keep on top of BAS deadlines.

Final Thoughts

Since April 2025, the ATO will begin moving non-compliant small businesses into monthly GST reporting. For those affected, it may feel like added pressure, but it could also be a valuable opportunity to build better business habits.

If you’re concerned, now is the time to review your processes and speak to us. Voluntarily moving to monthly reporting might even benefit your cash flow and help you stay ahead.