The ATO is getting serious about compliance – and small businesses who regularly lodge or pay their BAS late could soon feel the heat.
From July 2025, the ATO will begin mandating monthly Activity Statement lodgements for businesses with a poor compliance history. If your business has a track record of late lodgements or overdue payments, you could be required to switch from quarterly BAS reporting to monthly – whether you want to or not.
Here’s what you need to know, and what you can do to avoid getting caught up in this change.
Why is the ATO doing this?
The ATO’s goal is to improve overall tax compliance and reduce the risk of businesses falling behind on their GST, PAYG, and super obligations.
They’ve made it clear: late lodgements and missed payments are red flags. Moving non-compliant businesses to monthly reporting helps the ATO keep a closer eye on things and makes it harder for debt to snowball over time.
It’s not a punishment, but it is a wake-up call.
What changes for affected businesses?
If you’re moved to monthly lodgements:
- You’ll need to submit a BAS every month, not every quarter.
- That means 12 lodgements a year instead of 4.
- It also means more frequent reporting and tighter timeframes to get your books in order.
- And it means no BAS Agent lodgement and payment extension (currently an additional 4 weeks for quarterly lodgements).
- There’s no option to switch back until you’ve re-established a compliant lodgement and payment history.
That’s a lot more admin and if you’re already struggling to stay on top of quarterly BAS, it’s likely to add more stress!
How do I avoid being forced onto monthly BAS?
The good news? It’s avoidable, and manageable!
Here are some simple steps you can take right now to stay in the ATO’s good books:
1. Lodge on time, every time
Even if you can’t pay right away, lodging on time still matters. The ATO looks at lodgement behaviour just as much as payment history. Set calendar reminders or let your BAS Agent handle the deadlines so nothing slips through the cracks.
2. Pay what you can and talk to the ATO
If cash flow is tight and you can’t pay your BAS in full, don’t bury your head in the sand. Lodge anyway and arrange a payment plan. The ATO is much more understanding when you’re proactive.
3. Work with a BAS Agent (like us!)
Registered BAS Agents help you stay on track with lodgements, make sure you’re claiming everything correctly, and liaise with the ATO if needed. We can also help identify red flags before they become a problem.
4. Use cloud-based tools like Xero
Real-time data makes it easier to stay organised and up to date. Plus, automated reminders, reporting, and reconciliations help reduce human error, and save you time at BAS time.
5. Get help with cash flow planning
Falling behind on BAS payments often starts with a cash flow squeeze. We can help you build a cash flow forecast, set aside GST throughout the quarter, and plan for tax obligations ahead of time so you’re not left scrambling.
Already behind? Here’s what to do
If you’ve already missed a few BAS deadlines or are worried about your compliance history, don’t panic! But don’t wait either.
- Get up to date as soon as possible.
- Talk to your BAS Agent (us!).
- The ATO is more likely to be flexible when they see genuine effort to get back on track.
Final thoughts
Monthly BAS lodgements might not affect every business but it’s a clear sign that the ATO is tightening up. Now’s the time to get your books in order, review your systems, and make sure your compliance history doesn’t hold you back.
Need a hand keeping on top of BAS deadlines, sorting out past lodgements, or improving your cash flow planning? We’re here to help.
Reach out to the team at Blackwood Bookkeeping and we’ll help you stay on the ATO’s good side!
Book a discovery call with Sarah
Take the First Step Towards Financial Clarity and Confidence
We’re here to help you streamline your financial operations and eradicate financial stress in two simple ways:
- Stay Updated and Inspired
Join our LinkedIn newsletter, Eradicating Financial Stress, for regular insights, tips, and updates to keep your business thriving. Subscribe here. - Get Personalised Support
Book a private session with Sarah for a deep dive into your Xero file. Together, we’ll uncover opportunities to optimise your cash flow, boost efficiency, and fuel your business growth. Book a session here.
Let’s work together to simplify your finances and elevate your business!
