In the coming weeks, small business owners across Australia are bracing for a significant shift in their reporting obligations to the Australian Taxation Office (ATO). This change, which has been described as ‘massive’, could have a profound impact on those already grappling with the pressures of a cost-of-living crisis.
Under the new system, unless your business is turning over more than $20 million annually, you will be required to submit a Business Activity Statement (BAS) every quarter. However, the ATO is tightening its grip on businesses that have fallen behind on their tax obligations. Those who have missed payments, lodged their BAS late, or have discrepancies in their GST reporting will now be compelled to report on a monthly basis.
Belinda Raso, director of Tax Invest Accounting, has voiced concerns over the fairness of this alteration, especially given the current economic climate. ‘It doesn’t seem very fair that they’re to be hit like this, especially in a cost-of-living crisis,’ she said. For many small businesses, the shift to monthly BAS reporting is not just a minor inconvenience; it represents a significant increase in administrative workload and costs.
Contractors, sub-contractors, self-employed individuals, and ride-share operators are among those who could be affected. Raso estimates that up to 30% of her clients could be impacted by the change, which is set to take effect on April 1 this year. The additional time required to compile the necessary figures for monthly reporting—potentially up to four hours every cycle—translates to time away from running the business or additional fees if a tax or BAS agent is engaged.
The ATO’s rationale for this change is to encourage compliance and instil good business habits by aligning reporting with reconciliation processes. They argue that this will ultimately simplify reporting and save time. However, Raso and others in the industry are calling for a more gradual introduction of such changes, with a period of leniency to allow businesses to adjust.
The concern extends beyond the immediate impact. There is apprehension that this could be the beginning of a broader push to mandate monthly BAS reporting for all small businesses, not just those who have been non-compliant. Additionally, there is a call to raise the minimum threshold for GST reporting, which has remained at $75,000 since 2007. Adjusted for inflation, this figure would be closer to $120,000 today, a sum that Raso argues is a more realistic threshold for small business owners to sustain themselves.
The ATO has stated that affected businesses will be notified in writing from next month if they are subject to the change. Many businesses have already voluntarily shifted to monthly reporting, finding it aligns better with other monthly business practices and cash flow management.
As the ATO gears up to implement this change, the small business community is left to weigh the implications. For some, it may mean a more disciplined approach to financial management. For others, it could signify an additional burden at a time when they are already struggling to keep their heads above water.
What are your thoughts on this shift? Do you believe the ATO’s approach is fair, or should there be a more flexible transition period? If you’re a small business owner, how will this impact your operations? Share your thoughts in the comments below—we’d love to hear from you!
Also read: Is Australia’s GST a tax or a tariff? And why has it become a target in the trade wars?
Actually it is easier to do monthly reporting with BAS. As a previous small business owner, it was easier to collect information monthly than quarterly. With all the programs available now it should be quite easy to do if you have entered all information into your financial program every day. Unfortunately, doing the books is part of business ownership .
Computer programmes can keep track of all this now and produce the BAS at the push of a button. So I don’t see any problem for small business.
It is not too hard to accomplish Monthly BAS Statements, the Software Packages available now are a lot easier to use and contain a lot more functionality that when the BAS Statement was originally introduced.
Back in 2000, my Partner was working for Builders to deliver the Final Clean of the Property before handover, and I was using a system of Excel Spreadsheets to “do” her “Books”, then the BAS Statement was introduced, and I then developed a Database to do the job.
All the incoming jobs were entered, under Builder and Supervisor, and the Completed Jobs were printed out via an Excel Spreadsheet, and Faxed to the Builder.
When BAS time arrived, I just selected the BAS Tab, her profile, and the Start & Finish Dates required, and the output was BAS Compliant, with Jobs Completed and Paid, any Work related Offsets etc.
There was also a Tab for doing the End of Year Tax, to be forwarded to her Tax Agent.
I used that Database up until she Retired in 2013, and her Tax Agent really liked what was delivered for Tax Purposes.
It’s all a part of being a small business owner. If they fall behind with 3 month reporting then they are lazy or inept. If they are made to do monthly they may get the message.
Doing monthly should be cake walk for those that are organised.
If they have extra charges to do monthly then the great majority of small businesses can well afford it with all the money gouging surcharges they charge the public
I changed my electric to monthly, much easier to keep track and pay than quarterly.