GST Reporting Period Update: Stay Ahead of the Game with Important Changes from April 2025
G’day, valued clients and friends of ACT TAX GROUP. We’ve got an important update that could impact your business, and as always, we’re here to keep you informed and ahead of the curve. The Australian Taxation Office (ATO) has announced a major change that will take effect from April 1, 2025 – and it could mean more frequent GST reporting for some small to medium-sized businesses.
What Is GST Reporting and Why Is It Important?
Goods and Services Tax (GST) reporting is a critical process where businesses report and pay the GST they collect from customers. This ensures the Australian Taxation Office (ATO) receives accurate information about your business’s taxable sales and expenses. Staying compliant with GST reporting is vital to avoid penalties and maintain smooth business operations.
GST Reporting Period Update: What’s Changing?
From April 1, 2025, some small to medium-sized businesses may be required to switch from quarterly to monthly GST reporting. This change isn’t for everyone—the ATO is specifically targeting businesses that have experienced challenges in meeting their tax obligations.
The move to monthly reporting means affected businesses will need to submit 12 Business Activity Statements (BAS) per year instead of four. This allows the ATO to monitor GST payments more closely and ensures businesses meet their tax responsibilities promptly. While the shift may seem daunting, businesses that proactively adjust their systems will find it easier to maintain compliance and avoid potential penalties.
Who Will Be Affected?
If your business has a solid track record of:
Lodging Business Activity Statements (BAS) on time
Making GST payments promptly
Accurately reporting GST
You’re likely in the clear.
However, if you’ve faced issues like late lodgments, missed payment deadlines, or incorrect GST reporting, you might receive a notice from the ATO requiring you to move to monthly reporting. This change is intended to improve tax compliance by encouraging more frequent and accurate reporting.
Key Dates to Remember:
March 2025: The ATO will begin sending notifications to affected businesses.
April 1, 2025: Monthly reporting officially begins for those notified.
Why Is This Happening?
The ATO’s aim is to improve tax compliance and ensure businesses stay on top of their GST obligations. While more frequent reporting may sound like added work, there are some benefits to switching to monthly reporting:
Better Cash Flow Management: Spread your GST payments across the year.
Improved Accuracy: Catch errors early with more regular reporting.
Up-to-Date Financials: Get a clearer picture of your business’s financial health.
Monthly reporting may also reduce the likelihood of large, unexpected tax bills at the end of each quarter. By tracking and paying GST more frequently, businesses can smooth out cash flow fluctuations and maintain better financial oversight throughout the year.
Failure to Lodge (FTL) Penalties
The ATO imposes Failure to Lodge (FTL) penalties if businesses miss their BAS lodgment deadlines. Before applying penalties, the ATO typically issues a warning by phone or in writing. If a penalty is applied, you’ll receive a written notice detailing the amount and due date for payment.
The ATO recognizes there may be valid reasons for late lodgment and considers individual circumstances when applying penalties.
Failing to meet your GST obligations may result in penalties and a potential audit by the ATO.
What to Expect
The ATO will start issuing notifications in March 2025. To prepare, businesses should review their BAS lodgment history, ensure timely payment of GST, and address any outstanding compliance issues. Engaging with a tax professional can help identify potential risks and streamline your reporting processes before the changes take effect. If your business is affected, you’ll need to commence monthly GST reporting from April 1, 2025. This means going from four BAS lodgments a year to twelve.
We understand that monthly reporting may sound like extra paperwork, but there are some hidden perks. Many businesses find monthly reporting helps with:
Better cash flow management by spreading payments across the year.
More accurate financial tracking with up-to-date GST insights.
Reduced tax-time stress through regular monitoring and reporting.
What Happens If You Don’t Comply?
Failing to meet the new reporting requirements can result in serious consequences, including:
Penalties and Fines: Non-compliance may lead to financial penalties from the ATO.
Increased Scrutiny: Late or inaccurate lodgments can prompt more frequent audits.
Cash Flow Issues: Poor GST management may disrupt your financial operations.
To avoid these risks, it’s crucial to be proactive. At ACT TAX GROUP, we’ll help you stay compliant and avoid costly mistakes.
How ACT TAX GROUP Can Help
At ACT TAX GROUP, we’re committed to making this transition as smooth as possible. Partnering with a professional tax advisor can save you time, reduce errors, and ensure compliance with ever-changing regulations. Our experienced team can guide you through the GST reporting process, offering personalized solutions to fit your business needs. Here’s how we can support you:
Compliance Review: Our IPA-certified team will perform a comprehensive review of your GST compliance. We’ll identify potential issues and help you resolve them, ensuring you’re in the best position possible.
Efficient Monthly Reporting Systems: If you need to switch to monthly reporting, we’ll assist in setting up streamlined processes. From improving your bookkeeping to setting reminders and ensuring accurate GST calculations, we’ve got you covered.
For eligible small businesses, the Simpler BAS method can reduce reporting obligations. This streamlined approach requires you to report only key GST information – total sales, GST on sales, and GST on purchases – cutting down on paperwork and reducing the risk of errors. If you qualify, we can help you transition to this method to save time and improve efficiency.
Businesses using the Simpler BAS method report less information and must contact the ATO to elect for annual GST reporting within a specific timeframe at the start of the financial year.
FAQs
What is GST reporting, and who needs to report?
GST reporting involves declaring the Goods and Services Tax you collect and pay to the ATO through BAS. Paying GST requires businesses to report and pay GST based on their GST turnover, with different reporting cycles (monthly or quarterly) and specific requirements depending on the turnover thresholds. Businesses with a turnover of $75,000 or more must register and report GST.
How do I switch from quarterly to monthly GST reporting?
If required by the ATO, you will receive a notice prompting the change. Reporting and paying GST involves understanding the processes and requirements based on your GST turnover, including different reporting cycles such as monthly and simplified methods, and using specific accounting methods for calculating GST amounts on the Business Activity Statement (BAS). Our team can help you set up monthly reporting systems to ensure smooth and compliant transitions.
What are the penalties for late BAS lodgment?
The ATO applies Failure to Lodge (FTL) penalties for late BAS lodgment. Penalty amounts vary based on business size and the length of the delay.
How do I register for GST?
To register for GST, you must have an Australian Business Number (ABN) and meet the GST turnover threshold. Voluntarily registered businesses must stay registered for at least 12 months.