ATO Change: Monthly BAS for Non-Compliant Small Businesses

What's changing?

From April 1st, the Australian Taxation Office is implementing a significant change to Business Activity Statement (BAS) reporting requirements that could affect thousands of small businesses across the country. Currently, most businesses with an annual turnover under $20 million submit their BAS quarterly. However, under this new approach, businesses with a history of non-compliance will be required to report monthly instead.

Who will be affected?

The ATO's new measure targets businesses that have: a) Missed tax payments b) Lodged their BAS late and c) Have been identified as reporting GST incorrectly. This change could impact a wide range of small business operators, including:

• Contractors and subcontractors
• Self-employed individuals
• Rideshare drivers
• Small retailers
• Hospitality businesses
• Service providers

Financial experts estimate this could affect as many as 30% of small businesses nationwide.

What does this mean for your business?

If you're moved to monthly reporting, you could face:

1. Increased administrative burden: Preparing BAS statements could take up to four hours each reporting cycle
2. Higher costs: Whether you prepare your own BAS (taking valuable time away from running your business) or engage an accountant (who will charge for the additional work)
3. More frequent compliance requirements: Instead of four BAS submissions per year, you'll need to complete twelve

What can you do?

1. Review your compliance history: Have you missed BAS lodgements or payments in the past?
2. Check your communication from the ATO: Official notifications about this change will be sent out from next month
3. Improve your record-keeping: Better financial tracking can make monthly reporting less burdensome
4. Speak with your local ITP professional or Bookkeeping.solutions specialists and they can help determine if you might be affected and how to prepare for it.

While the ATO frames this change as a way to help businesses develop better reporting habits, the additional administrative burden comes at a difficult time. If you receive a notification, consult with your local ITP Queensland professional and their Bookkeeping.solutions specialists to find the best way to manage this obligation while minimising the impact on your business operations and costs. Bookmark this page and let’s have a chat!