Highlights of ATO’s guidance on tax debt, GST, bookkeeping and new PAYDAY rules for small business owners
Angela Allen, the ATO Assistant commissioner has urged small business owners in Australia to avoid compliance actions by taking simple steps in their business.
The commissioner has mentioned that small business owners often face penalties for maintaining inaccurate records, failing to disclose income, and ineffective cash flow management.
For small business owners to avoid errors and penalties, consulting tax practitioners can help them navigate these challenges.
Let’s see what ATO has urged the small business owners to do to simplify their financial management, and stay on top of tax obligations.
The $ 50 billion unpaid tax
ATO has sped up the process of collecting the unpaid tax of over $ 50 billion and has urged the small business owners to repay the tax obligations sooner.
In this regard, the commissioner has suggested that the business owners to not ignore the tax obligations. If paying in full is the issue, they can contact the ATO or a registered tax practitioner earlier to discuss what can be done.
A separate bank account for GST or PAYG
A business owner might face challenges managing cash flow. The ATO has highlighted the importance of maintaining a separate bank account for GST and PAYG collected on behalf of employees.
This ensures that small business owners can manage cash flow more easily and don’t have to rely on GST income or PAYG withholdings.
Streamline bookkeeping practices
The ATO has noted that income is being excluded when filing tax returns, specifically when income is received in cash or there are inconsistencies in the income records.
To avoid this, the ATO has recommended that business owners use digital tools and leverage the ATO app, which includes features such as myDeductions, a tax-withheld calculator, and a business performance check tool.
They have insisted on maintaining the overall accuracy, consistency, and completeness of record-keeping.
Effective from July 2026, employers in Australia are required to make superannuation guarantee contributions at the same time as they pay employees’ wages, rather than quarterly as made previously.
ATO has insisted that business owners review their payroll systems and superannuation processes and be prepared to make frequent superannuation guarantee payments.
Other key steps the ATO has affirmed include,
- The small business owners and tax practitioners need to stay updated on compliance focus areas, which are updated on the ATO website every quarter.
- Any non-compliance will be taken seriously, and action will be taken.
- For business owners to be successful, they need to be in touch with a tax practitioner registered with the Tax Practitioners Board and be aware of ATO obligations.
- If any business owner is planning to shut down their business in 2026, they need to take the essential steps mentioned on the website to avoid any non-compliance issues in future.
Source: Australian Taxation Office
For a small business owner to stay compliant and run their business successfully, it’s mandatory that they are guided by a registered tax practitioner and stay on top of their tax obligations.
Bookkeeping and cash flow management must be accurate to maintain stable financial management.
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With our expertise and industry knowledge of the geography, we can help small business owners scale their operations through end-to-end bookkeeping and compliance services.
