Jun 10, 2025 Joel Hernandez

ATO’s current focus areas for small businesses

In November 2024, ATO Deputy Commissioner for Small Business, Will Day, announced the ‘Getting It Right’ campaign. The campaign is an initiative by the ATO to highlight areas where they believe business taxpayers are getting it wrong, in an attempt to get them on the right track.

This is set to be an ongoing quarterly campaign where the ATO will update its key focus areas once a quarter on its webpage.

Transparency and timely communication from the ATO via this campaign is aimed at supporting small businesses get it right from the start and get their house in order early.

The ATO defines a small business as a sole trader, company, trust or partnership that operates a business which has an annual turnover of less than $10 million.

The current areas of focus are:

Contractors omitting income

Independent contractors operating their own businesses ought to ensure that all their income is reported on their tax returns. Increased focus on data matching by the ATO against various sources has revealed under-reporting of income.

For employees, salaries are reported to the ATO via Single Touch Payroll. For contractors, contract work income is reported to the ATO via the Taxable Payments Annual Report (TPAR).  Since 2012, businesses that pay contractors for certain services have been required to lodge a TPAR by 28 August each year.

As part of the data matching process, the ATO includes the information reported to it into the pre-filling reports for contractors to help them report their income correctly.

Non-compliance with GST obligations

From March 2025, small businesses with a poor compliance history would have received notice from the ATO of their requirement to move to monthly GST reporting.

This is said to have impacted approximately 3,500 small businesses with the new reporting cycle taking effect from 1 April 2025.

Small businesses that have demonstrated the following actions and failed to respond to ATO warnings should expect to receive the notice.

• Paying late or not paying the amount due
• Not lodging or lodging late
• Reporting tax obligations incorrectly

Monthly reporting is intended to help ease the stress on small businesses cash flow by making more regular, smaller, and hopefully more manageable payments.  It will generally increase the administrative burden on small businesses and will allow closer scrutiny by the ATO.  The monthly obligation is intended to align with the reconciliation processes for businesses.

Incorrect use of small business boost measures

In June 2023, the technology investment boost and skills and training boost were introduced to support small businesses by providing an additional 20% tax deduction on eligible expenditures.

The ATO has since noticed errors in claiming the boost measures, where small businesses are making opportunistic claims or simply misinterpreting the law.

Small businesses are now urged to amend their tax returns if they have made an error in claiming additional deductions under these measures.

Here are some things you can do:

Maintain good records

Ensure your accounts are up to date, and relevant supporting documents are stored securely for at least 5 years from the time the business tax return is lodged. Utilise business software that can streamline processes and save you time, so you can focus on growing your business.

If you are interested in business software or engaging someone to look after your bookkeeping, we can help with finding the most suitable option that works best for you.

Stay informed 

The ATO publishes relevant information on its website and more importantly, you can read the latest updates on tax for small businesses in the ATO’s small business room.

There are also free, self-paced courses released by the ATO to assist the learning needs of small businesses.

Get the right advice

Keeping up with the constant updates in tax legislation can be overwhelming. At RDL Accountants, we have the expertise to help you adopt good business habits, access tax incentives correctly and provide advice specific to your business needs.