The ATO is Cracking Down on BAS Non Compliance – What Small Businesses Need to Know About Monthly GST Reporting

If you’re a small business owner in Australia, the Australian Taxation Office (ATO) has just made it clear that late BAS lodgments, incorrect reporting, or non payment of GST will no longer be tolerated.

From 1 April 2025, the ATO will enforce a change that could impact thousands of small businesses across the country. Those with a poor compliance history such as consistently late BAS submissions or missed payments will be moved from quarterly to monthly GST reporting.

This is not a suggestion. It is a compulsory change and part of a wider effort by the ATO to improve compliance and reduce the growing burden of small business tax debt.

So, what does this mean for you? And how can you avoid being affected?

Let’s break it down.

Why the ATO Is Taking Action

The ATO has identified a worrying trend: a growing number of small businesses are falling behind on their Business Activity Statement (BAS) obligations. This includes

• Lodging BAS late

• Paying GST liabilities late or not at all

• Regularly misreporting figures

To encourage more consistent compliance and help businesses stay on track, the ATO will move non compliant entities to monthly GST reporting. This allows the ATO to keep a closer eye on business activity and ensures tax obligations are met more regularly.

The move is being made under the authority of the A New Tax System (Goods and Services Tax) Act 1999, specifically paragraph 27 15(1)(c), which gives the Commissioner of Taxation the power to determine a business's reporting cycle based on compliance history.

Who Will Be Affected

The ATO is targeting small businesses that have repeatedly failed to meet their tax obligations. According to the ATO, this includes businesses that

• Frequently lodge BAS late

• Fail to pay GST on time

• Make errors or inconsistencies in GST reporting

This is not a blanket rule for all businesses. It applies only to those who demonstrate a pattern of non compliance. However, if you have slipped up in the past or received multiple reminders from the ATO, it is worth reviewing your lodgment history now.

The ATO will notify affected businesses in writing. If you receive this communication, you will be required to begin monthly GST reporting from April 2025.

What Monthly BAS Reporting Means for Your Business

If you have been lodging quarterly BAS, switching to monthly reports can feel like a big change. Here is what it really means

Increased Frequency

You will need to submit your BAS every month. That is 12 times a year instead of four. This requires a much more consistent and efficient bookkeeping process to meet deadlines and avoid penalties.

Greater ATO Oversight

Monthly reporting gives the ATO better visibility into your financial activity and GST obligations. If your records have not been up to date, this is the time to tighten up your systems. The ATO will expect accuracy and transparency.

Cash Flow Adjustments

Instead of setting aside GST each quarter, you will pay monthly. This can help break payments into smaller, more manageable amounts but it also requires better cash flow planning and discipline.

Less Room for Error

With more frequent reporting and tighter timelines, there is less margin for mistakes. Inaccurate records or missed deadlines could lead to penalties and interest charges. This is where working with a qualified bookkeeper or BAS agent becomes essential.

What the ATO Expects Going Forward

The ATO is using more data and analytics to proactively identify businesses at risk of non compliance. Their goal is to help businesses stay on track but they are also prepared to take action when necessary.

If your business is moved to monthly BAS, you will be required to remain on that cycle for at least 12 months. After that, you may request to return to quarterly if you have demonstrated consistent on time lodgments and payments.

If you disagree with the ATO’s decision to move you to monthly reporting, you can lodge a formal objection. You will need to provide clear supporting evidence to back your case.

How to Avoid Being Moved to Monthly BAS Reporting

If you are unsure whether your business is at risk, take action now to stay off the ATO’s radar

Lodge BAS On Time

Late lodgments are one of the main triggers for review. Set reminders or work with a bookkeeper to ensure your statements are submitted by the due date every time.

Pay GST On Time

Even if cash flow is tight, GST payments should be treated as a priority. Consistent late payments will raise concerns with the ATO.

Keep Accurate Books

The ATO is cracking down on inconsistent or estimated reporting. Your records need to be accurate and up to date to support every BAS lodgment.

Use Cloud Based Software

Platforms like Xero, QuickBooks and MYOB can streamline BAS prep and reduce human error. They also provide transparency which the ATO values during reviews.

Partner with a Bookkeeper

A registered BAS agent or experienced bookkeeper can help you stay compliant, reduce errors and handle lodgments with confidence. This is especially important if you are currently behind or overwhelmed.

How Dynamic Bookkeeping Co Can Help

At Dynamic Bookkeeping Co. we work alongside small businesses to ensure they stay compliant with the ATO, avoid penalties and manage their GST obligations with ease.

We take the stress out of BAS by offering reliable, professional bookkeeping services that are tailored to your needs. Whether you are concerned about being moved to monthly reporting or just want to get ahead of the game, we are here to help.

We work with you one on one to get your books in order, keep lodgments on track and give you peace of mind that your ATO obligations are covered.

Don’t Wait Until the ATO Gets in Touch

If you have missed BAS lodgments or payments in the past, now is the time to act. Avoid being forced onto monthly reporting by taking control of your bookkeeping today.

Book a free consultation with Dynamic Bookkeeping Co. and let’s make sure your BAS is bulletproof before April 2025.

Call us on 0413 212 768 or contact us online to get started. Staying compliant doesn’t have to be complicated when you’ve got the right bookkeeper in your corner.