ATO Crackdown: Non-Compliant Businesses Face Monthly GST Reporting from ATO
More frequent BAS, bigger bookkeeping bills — why staying compliant with monthly GST reporting is now the gold standard for small business.
ATO Gets Tough on Late BAS Lodgers
The Australian Taxation Office (ATO) is sharpening its focus on businesses that fall behind on their GST obligations. If you’re regularly late lodging your Business Activity Statement (BAS) or missing payments, you may soon be required to report monthly instead of quarterly — even if your turnover doesn’t normally require it.
This tougher stance aims to increase compliance visibility and reduce unpaid GST across the economy.
According to Accounting Times, ATO Deputy Commissioner Hoa Wood said:
“Where businesses are not meeting their obligations, we may move them to monthly reporting to increase visibility.” – Source: Accounting Times
While the quote comes from a media source and isn’t published on the ATO’s own site, the ATO does confirm it can enforce a change in GST reporting cycle due to non-compliance:
For many small businesses, quarterly BAS lodgement helps manage time and cash flow. A move to monthly reporting changes that rhythm dramatically.
12 lodgements per year instead of four means:
More admin
Less time to set aside funds
Reduced flexibility in managing GST liabilities
And critically — increased costs.
Higher Frequency = Higher Costs
While costs vary depending on the volume of transactions and your service provider, more frequent lodgements generally mean more time spent on compliance.
Expert Insight: “Monthly reporting adds significant time and labour to the bookkeeping process. It’s a hidden cost that can add up quickly”
If you currently pay $300 per quarter for BAS support, switching to monthly could increase that to around $200–$300 per month, depending on your setup. That could mean an extra $2,400 to $3,600 per year — not counting internal admin time.
It’s a costly shift — like trading in your quarterly golden cruise for a monthly rowing race.
Who’s at Risk?
According to Accounting Times, the ATO has already issued over 20,000 warning letters to non-compliant businesses and agents. While this figure isn’t confirmed on ato.gov.au, it signals a growing push to clamp down on late lodgers.
Businesses most at risk include those who:
Lodge BAS late on a regular basis
Miss GST payments without arranging payment plans
Ignore ATO communication or overdue notices
Non-compliance isn’t just a tax problem — it often points to deeper cash flow issues.
Remember: GST isn’t your money. You collect it on behalf of the ATO. Falling behind puts your business at financial and legal risk.
Why Staying Compliant Is Worth Its Weight in Gold
There’s a golden rule in small business — look after your compliance, and your compliance will look after you.
By meeting BAS deadlines:
You avoid unnecessary ATO scrutiny
You reduce accounting fees
You maintain smoother cash flow
Keeping your reporting quarterly saves time, money, and stress. And it keeps the ATO out of your day-to-day operations.
Take Action Before the ATO Does
The ATO’s official advice is clear:
“If you fail to meet your tax obligations, we may change your reporting and payment cycle.” – ATO – Lodging GST returns
If you’re struggling to meet BAS deadlines, now is the time to act.
Set up payment plans if you’re behind
Automate your GST record-keeping where possible
Work closely with your accountant or bookkeeper to stay on track
Don’t Let the ATO Take the Reins
If you’re worried about falling behind or unsure what your next BAS lodgement should look like, we’re here to help.
Contact DJ Grigg Financial today for a BAS health check and tailored support. Let us help you stay compliant, avoid costly changes, and keep your financial systems golden.
Superannuation is the golden ticket to a secure retirement, but understanding how it’s taxed can feel overwhelming. The good news? The Australian super system is designed to be tax-efficient, helping you maximise your savings over time. Let’s break it down into simple terms so you can make informed financial decisions.
The Three Points of Super Taxation
Australia’s superannuation tax system follows a TTE structure—taxed, taxed, exempt. This means super is taxed at three key points:
Contributions – taxed when they enter your super fund
Investment earnings – taxed while they grow
Withdrawals – generally tax-free in retirement (from taxed super funds)
Each stage has its own tax rate and rules, making it essential to understand how your money is treated over time.
1. Tax on Super Contributions: Paying Less Now for More Later
When you or your employer make contributions to your super, some of that money is taxed. There are two main types of contributions:
Concessional (before-tax) contributions: Employer super guarantee (SG) payments, salary sacrifice, and voluntary pre-tax contributions are taxed at 15%. This is much lower than most personal income tax rates, making super a tax-effective way to save.
Non-concessional (after-tax) contributions: These come from your take-home pay and are not taxed when deposited, as you’ve already paid tax on this income.
However, if you exceed contribution caps ($27,500 per year for concessional and $110,000 per year for non-concessional as of 2023–24), additional tax may apply.
2. Tax on Super Investment Earnings: Growing Your Nest Egg
While your super fund invests your savings, any earnings (dividends, capital gains, or interest) are taxed at 15%. If an asset is held for over a year, capital gains tax is reduced to 10%.
Compared to personal investment accounts, where gains can be taxed up to 45%, super offers a golden opportunity to grow wealth in a lower-tax environment. Investment earnings on assets supporting a retirement phase income stream are tax-free, subject to a transfer balance cap of $1.9 million as of 2023–24.
3. Tax on Super Withdrawals: The Reward for Patience
Once you reach retirement age (currently 60 for most people), withdrawals from your super become tax-free if taken from a taxed super fund. This allows you to enjoy your hard-earned savings without worrying about the taxman.
If you withdraw before preservation age (between 55 and 60, depending on birth year), tax rates apply:
Up to $235,000 (as of 2023–24) – tax-free
Above this amount – taxed at 17% (including Medicare levy)
For super funds with untaxed elements (common in some public sector funds), withdrawals may attract tax even after age 60.
How Australia’s Super Tax System Compares Globally
Many countries follow an EET model (exempt, exempt, taxed), where contributions and earnings are tax-free, but withdrawals are taxed. Australia’s TTE model ensures the government collects tax revenue upfront, while retirees enjoy a tax-free income later. This unique approach encourages long-term saving while maintaining economic stability.
Why Understanding Super Tax Matters
Being informed about super taxation can help you:
Maximise your retirement savings – Take advantage of concessional tax rates and voluntary contributions.
Avoid unexpected tax bills – Stay within contribution caps and understand withdrawal rules.
Plan ahead for policy changes – Super tax rules can change, so keeping up to date ensures your retirement strategy remains effective.
Financial experts agree that leveraging tax benefits within super is one of the smartest ways to grow wealth. “A well-planned superannuation strategy can significantly reduce tax and ensure a comfortable retirement.”
Employers that provide employees with the use of eligible electric vehicles (EVs) can potentially qualify for an FBT exemption. This should normally be the case where:
The car is a zero or low emission vehicle (battery electric, hydrogen fuel cell or plug-in hybrid electric);
The car is both first held and used on or after 1 July 2022; and
The value of the car is below the luxury car tax threshold for fuel efficient vehicles (which is $89,332 for 2024-25 financial year).
Plug-in hybrid vehicles no longer FBT exempt
From 1 April 2025, plug-in hybrid electric vehicles will no longer qualify for the FBT exemption unless:
The use of the vehicle was exempt before 1 April 2025, and
There is a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025.
If there is a break or change to that commitment on or after 1 April 2025 then the exemption might not continue to be available.
Working with the exemption
Even if the FBT exemption applies, your business will still need to work out the taxable value of the benefit as if the FBT exemption didn’t apply. This is because the value of the exempt benefit is still taken into account when calculating the reportable fringe benefits amount of the employee. While income tax is not paid on this amount, it can impact the employee in a range of areas (such as the Medicare levy surcharge, private health insurance rebate, employee share scheme reduction, and social security payments).
This means the employee’s own home electricity costs incurred on charging the electric vehicle will often need to be worked out. This figure can generally be treated as an employee contribution to reduce the value of the benefit.
While this can be practically difficult to determine, the ATO has issued some guidelines that provide a 4.20 cent per km shortcut rate that can potentially help with the calculation. These guidelines do not apply to plug-in hybrid vehicles.
Many electric vehicles are also packaged together with electric charging stations. Just be aware that the FBT exemption for electric cars does not extend to charging stations provided at the employee’s home
Providing equipment to work from home
Many businesses continue to offer flexible work from home arrangements. To assist, employees are often provided with work-related items to assist them to work from home. In general, where work related items are provided to employees and used primarily for work, FBT shouldn’t apply.
For example, portable electric devices such as laptops and mobile phones provided to employees shouldn’t trigger an FBT liability as long they are primarily used by your employees for work. Multiple similar items can also be provided during the FBT year where required – for example multiple laptops have been provided to the employee – but only of the business has an aggregated turnover of less than $50m (previously, this threshold was less than $10m).
If the employee is using equipment provided by the business for their own private use, normally FBT would apply to the private use. However, the FBT liability can be reduced based on the business use percentage.
Does FBT apply to your contractors?
The FBT rules tend to apply when benefits are provided to employees and certain office holders, such as directors. FBT should not apply when benefits are provided to genuine independent contractors but, you need to be sure that your contractors are in fact contractors.
Are your contractors really contractors?
Following two landmark decisions handed down by the High Court, the ATO has now finalised a ruling TR 2023/4 that helps determine whether a worker is an employee or an independent contractor.
If the parties have entered into a written contract, then you need to focus on the terms of that contract to establish the nature of the relationship (rather than looking at the conduct of the parties). However, merely labelling a worker as an independent contractor doesn’t necessarily mean that they won’t be treated as an employee if the terms of the contract suggest that the parties have entered into an employment relationship.
The ATO has also issued PCG 2023/2 that sets out four risk categories. Arrangements will tend to be viewed in a more favourable light where:
There is evidence to show that you and the worker have agreed on the classification;
There is a comprehensive written agreement that governs the relationship;
There is evidence that you and the worker understand the consequences of the classification;
The performance of the arrangement hasn’t deviated significantly from the terms of the contract;
Specific advice has been sought confirming that the classification is correct; and
Tax, superannuation, and reporting obligations have been met when the worker is classified as an employee or independent contractor (whichever relevant).
If your business employs contractors, you should have a process in place to ensure the correct classification of the arrangements and to determine the ATO’s risk rating. These arrangements should also be reviewed over time.
Even when a worker is a genuine independent contractor, just remember that this doesn’t necessarily mean that the business won’t have at least some employment-like obligations to meet. For example, some contractors are deemed to be employees for superannuation guarantee and payroll tax purposes.
The top FBT risk areas
Mismatched claims for entertainment – claimed as a deduction but no FBT
One of the easiest ways for the ATO to pick up on problem areas is where there are mismatches.
When it comes to entertainment, employers are often keen to claim a deduction but this can be a problem if it is not recognised as a fringe benefit provided to employees. Expenses related to entertainment such as a meal in a restaurant are generally not deductible and no GST credits can be claimed unless the expenses are subject to FBT.
Let’s say you taken a client out to lunch and the amount per head is less than $300. If your business uses the ‘actual’ method for FBT purposes, then there should not be any FBT implications. This is because benefits provided to client are not subject to FBT and minor benefits (i.e., value of less than $300) provided to employees on an infrequent and irregular basis are generally exempt from FBT. However, no deductions should be claimed for the entertainment and no GST credits would normally be available either.
If the business uses the 50/50 method, then 50% of the meal entertainment expenses would be subject to FBT (the minor benefits exemption would not apply). As a result, 50% of the expenses would be deductible and the business would be able to claim 50% of the GST credits.
Employee contributions by journal entry in the accounts
Many businesses use after-tax employee contributions to reduce the value of fringe benefits. It is also reasonably common for these contributions to be made by journal entry through the accounting system only (rather than being paid in cash).
While this can be acceptable if managed correctly, the ATO has flagged numerous concerns including whether journal entries made after the end of the FBT year are valid employee contributions.
For an employee contribution made by way of journal entry to be effective in reducing the taxable value of a benefit, all of the following conditions must be met:
The employee must have an obligation to make a contribution to the employer towards a fringe benefit (i.e., under the employee’s remuneration agreement);
The employer has an obligation to make a payment to the employee. For example, the parties may agree that the employer will lend an amount to the employee or the employee might be entitled to a bonus that hasn’t been paid yet. If a loan is made by the employer then this could trigger further tax issues that need to be managed;
The employee and employer agree to set-off the employee’s obligation to the employer against the employer’s obligation to the employee; and
The journal entries are made no later than the time the financial accounts are prepared for the current year (i.e., for income tax purposes).
Failing to ensure that arrangements involving fringe benefits and employee contributions are clearly documented can lead to problems. For example, the ATO may ask to see evidence of the fact that the employer is actually under an obligation to make contributions towards a fringe benefit. If there is no evidence, then significant FBT liabilities could arise.
Not lodging or Late FBT returns
The ATO is concerned that some employers are not lodging FBT returns when required to.
If your business employs staff (even closely held staff such as family members), and is not registered for FBT, it’s essential to ensure that the position is reviewed to check whether the business could potentially have an FBT liability.
If the business provides cars, car spaces, reimburses private (not business) expenses, provides entertainment (food and drink), employee discounts etc., then you are likely to be providing at least some fringe benefits.
There is a list of benefits that are considered exempt from FBT, such as portable electronic devices like laptops, protective clothing, tools of trade etc. If your business only provides these exempt items, or items that are infrequent and valued under $300, then you are unlikely to have to worry about FBT.
Make sure you have reviewed the FBT client questionnaire we sent you!
FBT Housekeeping & Reducing the FBT record keeping burden
Record keeping for FBT purposes can be onerous. From 1 July 2024 however, your business will have a choice to keep the existing FBT record keeping methods, use existing business records where those records meet the requirements set out by the legislative instrument, or a combination of both methods:
Temporary accommodation relating to relocation declaration – See LI 2024/8
FBT housekeeping
It can be difficult to ensure the required records are maintained in relation to fringe benefits – especially as this may depend on employees producing records at a certain time. If your business has cars and you need to record odometer readings at the first and last days of the FBT year (31 March and 1 April), remember to have your team take a photo on their phone and email it through to a central contact person – it will save running around to every car, or missing records where employees forget.
Should You Lodge an FBT Return? The Golden Rule for Staying ATO Compliant
Fringe Benefits Tax (FBT) might not be top of mind for every business owner, but overlooking it can lead to costly mistakes. Lodging an FBT return isn’t just about compliance—it’s a safeguard for your business. So, should you lodge an FBT return, even if you have no tax to pay? Let’s break it down.
What is Fringe Benefits Tax (FBT)?
FBT is a tax employers pay on certain benefits provided to employees or their associates (such as family members). It is separate from income tax and covers non-cash perks such as:
Private use of a business-owned vehicle
Discounted goods or services for employees
Employer-covered personal expenses
Rent-free or subsidised accommodation
Low-interest loans
Entertainment, including food, drinks, and event tickets
Salary packaging arrangements
If your business provides these perks, FBT may apply, and you could be required to lodge an FBT return.
Do You Need to Lodge an FBT Return?
The Australian Taxation Office (ATO) states that businesses with no FBT liability are not required to lodge a return. However, if you don’t have an FBT liability and haven’t paid FBT instalments, you should submit a Fringe Benefits Tax – Notice of Non-Lodgment instead of an FBT return. This informs the ATO that no return is necessary while ensuring your business remains compliant.
That said, lodging an FBT return can be a strategic move, even if you don’t owe anything. Here’s why:
1. Lodging Limits ATO Audits to Three Years
Without lodging an FBT return, the ATO can audit your business indefinitely. If a mistake is discovered years down the track, you could be liable for back taxes, penalties, and interest. Lodging a return closes the window of ATO scrutiny to just three years, protecting you from unnecessary stress and financial risk.
2. Common FBT Mistakes Could Cost You
Even well-managed businesses make FBT mistakes. One of the most common errors involves calculating the private use of company vehicles. Many businesses use the logbook method but forget to factor in deemed depreciation correctly. If this mistake is found, the ATO can reassess your FBT liability for every year the vehicle was in use.
Another common issue is failing to track meal entertainment expenses. Not all entertainment benefits are treated equally for FBT purposes. For example:
If an employee, John, wines and dines clients, those expenses may be subject to FBT. If another employee, Dave, attends the annual office Christmas party, those expenses could be exempt.
FBT Compliance: The ATO is Watching
The ATO has signalled increased scrutiny on FBT compliance this year. If your business provides fringe benefits, taking a proactive approach is essential. Lodging an FBT return ensures you are on record as meeting your obligations, reducing audit risk and protecting your financial future.
The Golden Takeaway: Protect Your Business
Lodging an FBT return is like keeping a golden safety net around your business. It protects you from unlimited audits, reduces financial risk, and ensures you stay ATO compliant. However, if you don’t have an FBT liability and haven’t paid FBT instalments, lodging a Fringe Benefits Tax – Notice of Non-Lodgment is sufficient to keep the ATO informed and maintain compliance.
If you’re unsure about your FBT obligations, our team at DJ Grigg Financial can help you navigate the process and keep your business on solid ground.
Contact us today to discuss your FBT compliance and secure your business’s financial future.
A Costly Mistake: The Rise of Payment Redirection Scams
Scammers are getting smarter, and businesses are paying the price. Payment redirection scams cost Australian businesses millions every year. In 2022 alone, payment redirection scams cost Australian businesses $224 million, with small and micro-business losses increasing by 95% from the previous year. A recent Western Australian court ruling has made one thing clear—businesses must take proactive steps to protect themselves, or they could bear the financial burden of fraud.
What Is a Payment Redirection Scam?
Payment redirection scams occur when cybercriminals intercept invoices or payment details and trick businesses into sending money to fraudulent accounts. These scams typically involve compromised emails, impersonation, and subtle changes to payment details. Scammers often gain access through business email compromise, where they infiltrate or spoof legitimate email accounts to deceive recipients. Once the money is transferred, it often vanishes overseas, making recovery nearly impossible.
Court Ruling: A Wake-Up Call for Businesses
In a landmark case, a Western Australian court ruled that businesses must verify payment details before making transactions. A contractor was scammed out of $190,000 after fraudsters gained access to their email system and provided false bank details to a client. Despite some attempts at verification, the court found that the business did not do enough to prevent the fraud. This ruling sets a precedent—if you fall victim to a payment redirection scam, you may still be liable for the original payment.
How Cybercriminals Gain Access
Scammers use various tactics to infiltrate business systems:
Email Compromise – Hackers gain access to company emails and monitor communications.
Fake Invoices – Fraudsters send invoices with altered bank details.
Urgency Tactics – Scammers pressure businesses to act quickly, reducing the likelihood of verification.
Suspicious Emails – Be cautious with emails containing hyperlinks, urgent payment requests, or demands for sensitive information.
The Golden Rules for Protecting Your Business
Just as gold must be tested for authenticity, every payment request should undergo strict verification. Here are key steps to safeguard your business:
1. Verify Bank Details Before Payments
Never change payment details based on an email alone. Call the supplier using a trusted phone number to confirm any changes. Use secure communication channels for transmitting sensitive financial information.
2. Enable Multi-Factor Authentication (MFA)
A strong lock on your email account is crucial. Use MFA to add an extra layer of security and prevent unauthorised access.
3. Train Your Team to Spot Red Flags
Educate staff on common scam tactics. If an email urges immediate payment or contains subtle changes in account details, treat it as suspicious.
4. Use Pass-Phrases Instead of Passwords
A simple password is like a cheap lock—it won’t keep criminals out. Use long, unique pass-phrases to strengthen security.
5. Implement Strict Payment Controls
Introduce internal approval processes for high-value transactions. A second level of authorisation can stop scammers in their tracks.
The Role of Banks in Fraud Prevention
Regulators are pushing for Australian banks to introduce a confirmation of payee system, which will help verify recipient details before transactions go through. While this initiative is promising, it has not yet been fully implemented in Australia. Businesses should not rely solely on banks for fraud prevention but must take proactive internal measures to safeguard their financial transactions.
Report Scams to the Authorities
If you suspect a payment redirection scam, report it immediately to the Australian Taxation Office (ATO) and Scamwatch. The ATO provides guidance on how to verify or report a scam, ensuring that other businesses do not fall victim to similar frauds. (Verify or report a scam – ATO)
Protect Your Business Like a Gold Reserve
Gold reserves are guarded with extreme care—your business funds deserve the same level of protection. Cybercriminals are always looking for their next victim, but by staying informed and implementing robust security measures, you can keep your business safe.
Need Help Strengthening Your Cybersecurity?
At DJ Grigg Financial, we help businesses navigate financial risks, including fraud prevention. Contact us today for expert advice on safeguarding your finances.
ATO’s Small Business Focus Areas for 2025: Stay Compliant and Secure Your Business Future
The Australian Taxation Office (ATO) has released its key focus areas for small businesses in 2025. Understanding these priorities can help you avoid costly mistakes and ensure your business stays on the right side of tax compliance.
Why Staying ATO-Compliant is Crucial
Tax compliance isn’t just about ticking boxes—it’s about securing the financial health of your business. Non-compliance can lead to audits, penalties, and even legal action. By understanding the ATO’s latest focus areas, you can take proactive steps to protect your business and financial future.
Key ATO Focus Areas for Small Businesses in 2025
1. Business Income is Not Personal Income
Your business’s money and assets are not personal funds. The ATO is paying close attention to business owners who use company funds for personal expenses without proper documentation.
Common mistakes include:
Using business accounts to pay personal bills without recording them properly.
Taking out loans from the business without following Division 7A rules, which can result in them being treated as dividends by the ATO.
Not declaring interest on business loans to owners.
The ATO provides clear guidance on this issue, which you can review in detail here.
Expert Tip: The ATO states that “Keeping business and personal finances separate isn’t just good practice—it’s essential for compliance.”
2. Claiming Deductions and Concessions Correctly
Small businesses often claim deductions and concessions, but the ATO is watching for errors and misreporting.
Areas under scrutiny:
Incorrect claims for small business CGT concessions.
Overstating deductions for non-commercial business losses.
Claiming expenses that are not business-related.
Incorrect GST registration and reporting, particularly for ride-sourcing and taxi services.
Before claiming, ensure you meet all eligibility criteria. A simple mistake could lead to amended assessments, repayments, and penalties. The ATO provides further information on their Small Business Focus Areas page.
3. Operating Within the Tax System
The ATO is cracking down on businesses that underreport income, over-claim expenses, or engage in risky tax practices.
Behaviours that raise red flags:
Not declaring all cash income.
Poor record-keeping that leads to inaccurate reporting.
Using business funds for personal expenses without proper documentation.
Not lodging returns and paying tax on time.
Employers paying cash wages to avoid tax and superannuation obligations.
If the ATO identifies issues, they may contact you or your tax professional. In severe cases, businesses may face audits, penalties, or legal action. You can learn more about what attracts ATO scrutiny here.
How the ATO Supports Small Business Compliance
The ATO provides several resources to help small businesses meet their obligations, including:
Educational materials and self-paced courses.
Webinars and tailored support programs.
Guidance on voluntary disclosures if errors are identified.
If you receive communication from the ATO, don’t ignore it. Engaging early can help prevent more serious consequences.
Steps to Protect Your Business
If you’re concerned about your tax position, take action now:
Seek Professional Advice – Speak to a registered tax accountant to ensure you’re meeting all ATO requirements.
Correct Mistakes Early – If you identify errors, request an amendment or make a voluntary disclosure to the ATO.
Improve Record-Keeping – Ensure financial records are accurate and up to date.
Report Suspicious Activity – If you suspect tax evasion, report it confidentially to the ATO.
Secure Your Business Future – Talk to Us Today!
Staying compliant with ATO regulations ensures your business remains financially strong and free from penalties. If you need expert guidance, DJ Grigg Financial is here to help. Contact us today for professional tax advice and ensure your business stays on the right track.
