Tax time is just around the corner, and if you’re one of Australia’s 2.6 million small business owners, the Australian Taxation Office (ATO) wants your attention.
The ATO has launched a new campaign, ‘Ready for Business’, and it’s not just about friendly reminders—there’s a clear message: get your tax and superannuation affairs in order, or you could face serious consequences.
Why the ATO is watching small businesses closely
Small businesses are the backbone of the Australian economy, but they’re also a major focus for the ATO this year.
While most business owners do the right thing, the ATO has flagged that some are deliberately dodging their obligations.
The numbers are eye-watering: an estimated $8 billion in Goods and Service Tax (GST) goes uncollected each year due to non-compliance. That’s a lot of money not making its way to essential services and infrastructure.
GST: The ongoing area of concern
One of the ATO’s biggest headaches is GST compliance.
Not every small business needs to register for GST, but if your turnover is $75,000 or more—or if you’re in the business of providing taxi, limo, or ride-sourcing services—you must register, collect GST, and pay it to the ATO.
ATO deputy commissioner Will Day has a simple message: ‘Don’t be tempted to dip into GST, Pay As You Go (PAYG) withholding or super to manage your cash flow.’
He recommends setting up separate bank accounts for these funds so you’re not caught short when it’s time to pay up.
Ride-sourcing and gig economy in the spotlight
The gig economy is booming, with more than 70,000 Australians earning extra income through side hustles, ride-sourcing, and sharing economy platforms.
The ATO is keeping a close eye on these activities, especially as the cost of living pushes more people to take on multiple jobs.
In fact, the Australian Bureau of Statistics found there were one million multiple job-holders as of December.
Earlier this year, the ATO wrote to ride-sourcing operators and taxi drivers, warning that those operating outside the system would face consequences.
The result? Over 3,000 new GST registrations. The message is clear: if you’re earning money from these activities, you need to declare it and meet your tax obligations.
Monthly reporting for repeat offenders
If you have a history of late payments, non-lodgement, or incorrect reporting, the ATO may have already moved you from quarterly to monthly GST reporting.
This change, which affected around 3,500 small businesses in April, is designed to keep a closer eye on those who’ve struggled to stay compliant in the past.
Is your side hustle now a business?
With so many Australians turning hobbies and side gigs into income streams, it’s important to know when your side hustle becomes a business in the eyes of the ATO.
Generally, if you’re carrying out continuous and repeated activities with the aim of making a profit, you’re running a business—and that comes with tax, super, and registry obligations.
Not sure where you stand? The ATO has a handy guide to help you figure out if your side hustle qualifies as a business and what you need to do next.
Avoiding a nasty tax surprise
One of the biggest traps for new business owners is underestimating their tax bill.
The ATO encourages new owners to plan ahead and consider prepaying their estimated tax liability through PAYG instalments.
This can help you avoid a big, unexpected bill when you lodge your first tax return.
ATO support and resources
The ‘Ready for Business’ campaign isn’t just about compliance—it’s also about support.
The ATO is sending out emails to small business owners with tips, resources, and reminders to help you stay on track.
If you’re new to business, take advantage of these resources to get things right from the start.
What happens if you don’t comply?
The ATO has made it clear: those who deliberately avoid their obligations will face consequences. This could mean audits, penalties, or even legal action in serious cases.
But for those who make an honest mistake, the ATO is more likely to offer support and guidance to help you get back on track.
Remember, staying informed and organised is the best way to keep your business thriving and stress-free at tax time.
If you’re unsure about your obligations, don’t hesitate to seek advice from a registered tax agent or the ATO’s support services.
Your turn: Have your say
As the ATO continues to focus on small business compliance and tax obligations, understanding these key points can help business owners stay informed and prepared for tax time.
Staying aware of the latest requirements and available resources is essential for managing your business responsibly and avoiding potential penalties.
What’s your biggest tax-time challenge as a small business owner or side hustler? Have you received a warning or support email from the ATO? How do you manage your GST, PAYG, and super obligations?
Share your experiences, tips, or questions in the comments below—your story could help others in our community avoid common pitfalls and stay on the right side of the tax man.
Also read: Getting ready for tax time
