'Not the right way forward': accountant calls out ATO powers on GST reporting

“Examples of failing to comply with your tax obligations include lodging or paying late, failing to lodge or pay, or reporting your tax obligations incorrectly.”

Currently, all businesses with a GST turnover of over $20 million must report monthly, while those under this threshold have an option to report either monthly, quarterly or annually.

Speaking to Accountants Daily, Two Sides Accounting founder Natalie Lennon (pictured) said the ATO’s announcement is “another example of the government coming up with something that they think is a good idea, but not actually practically thinking it through”. 

She noted that some businesses are not doing their quarterly reporting because they are overwhelmed, struggling financially, or they do not have the time.

“Changing their cycle from quarterly to monthly is not going to make any difference … I don't think it's the right way forward.”

While Lennon opposes the ATO’s new power, she said that she has not yet seen this being implemented against any business.

“I don't think it's fair because basically [saying] that you're going to bring small businesses in line with larger businesses given the fact that small businesses don't have the resources that the bigger businesses do. It's just putting more burden on them at a time that they obviously need some sort of assistance,” she said.

Lennon noted that there are existing integrity measures: “There's other things in place, fines, penalties, there's interest. So how is putting another layer of compliance going to force them into doing the right thing? I don't think it's going to [work] … trying to put them onto a monthly reporting is a bit silly.”

Owners must stay engaged with advisers and the Tax Office to stay compliant and avoid penalties, she said.

“[Communicate] with your accountant and the ATO, as they understand your circumstances and [if] you have a payment plan in place, you've been doing the right thing; but if you just put your head in the sand and ignore your accountant and ignore the ATO, that's when you're going to start being hit with fines and penalties and being pushed on this monthly reporting cycle.”