ATO Pushes Non-Compliant Small Businesses to Monthly GST Reporting

By NextGen iQ

Starting 1 April 2025, around 3,500 small businesses will be moved from quarterly to monthly GST reporting — not by choice, but by directive.

This latest compliance measure from the ATO is part of its “Getting it Right” campaign, and it’s aimed squarely at businesses with a track record of non-payment, late lodgement, or poor reporting accuracy.

What’s changing?

The ATO will begin notifying selected small businesses (and their tax agents) that their GST reporting cycle is being forcibly changed from quarterly to monthly.

The new cycle will apply for a minimum of 12 months, with the intention of:

Increasing visibility over business activity
Improving cash flow transparency
Ensuring more timely correction of reporting errors or omissions

There will be a review process available, but only for businesses that believe the change has been made in error or that can demonstrate a genuine improvement in compliance behaviour.

Why the ATO is doing this

The ATO has long flagged that a subset of small businesses consistently fall short on BAS obligations — either by failing to lodge on time, misreporting, or underpaying. For these cases, quarterly reporting gives too much leeway and too little oversight.

By shifting non-compliant businesses to monthly reporting, the ATO:

Gets more real-time data on business income and GST liabilities
Can identify issues sooner, reducing the scale of errors or evasion
Applies behavioural pressure to improve overall compliance

It’s not a new power — the ATO has always been able to adjust reporting cycles — but this marks a coordinated enforcement approach.

What tax practitioners should do

If representing small business clients with patchy BAS histories, now is the time to:

Identify clients at risk — late lodgers, repeat errors, frequent ATO reminders.

Proactively address compliance issues — before a forced cycle change takes effect.

Communicate the implications — monthly reporting means tighter cash flow management, more frequent reconciliations, and increased admin.

Set up automation or reminders in BAS software tools to help clients keep pace.

Also important: consider whether a GST refund cycle may be affected. Monthly refunds may be faster — but monthly scrutiny is also more likely.

Not all small businesses are affected

To clarify: this change only applies to a targeted group based on compliance history. Most small businesses will remain on quarterly reporting by default.

However, the message is clear — good compliance gets flexibility; poor compliance gets closer monitoring.

Final Thoughts

This move fits within the ATO’s broader push for data-driven, behaviour-based regulation. It’s not about penalising small business — it’s about making non-compliance too inconvenient to continue.

For advisers, the best approach is to help clients avoid the forced monthly cycle by getting ahead of lodgement, payment, and accuracy issues now.