A rundown on ATO Updates for the 2025 Financial Year

The ATO has made quiet but significant updates this year to how it manages debts—and if you’re not paying close attention, you could be hit with unexpected interest charges, stricter payment arrangement rules, or mandatory monthly GST reporting. These aren’t just administrative tweaks; they can affect your cash flow, compliance risk, and ability to plan ahead. We’re seeing how easy it is for businesses to get caught off guard. Below, we break down the key changes you need to know—and what you can do now to stay ahead.

The ATO Will No Longer Notify You When Only Interest Is Accruing – Here’s What You Need to Know
The ATO has changed how it communicates about tax debts, and it’s important for taxpayers to be aware of the implications—especially when significant interest charges are involved.
As of now, the ATO will no longer issue automated Statements of Account (SOAs) if the only activity on your account is the accrual of General Interest Charges (GIC). In other words, if you're incurring interest on an unpaid tax debt but there are no other recent transactions, you won't be notified.
Why this matters:
Many taxpayers assume they'll be alerted when interest is accruing—but with these changes, that's no longer the case. If you're unaware that a balance remains unpaid, GIC will continue to build up silently until the debt is cleared—potentially costing you more over time.
Key points to be aware of:

• You and your tax agent can check your account balance and recent transactions, including GIC, via ATO online services at any time.
• In some cases, the ATO may send reminders via SMS, email, or myGov, but these are not guaranteed.
• You can request a Statement of Account directly from the ATO if needed.

The ATO will still issue SOAs when:

• Interest accrues on early payments
• Credits or refunds are applied to offset other debts
• A Notice of Assessment is issued (in some cases)

To avoid unnecessary interest, it's a good idea to monitor your ATO account regularly—especially if you know there's an outstanding BAS or income tax liability.
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ATO to Shift Non-Compliant Small Businesses to Monthly GST Reporting
The ATO has announced that from 1 April 2025, around 3,500 small businesses with ongoing GST compliance issues—such as late lodgements, missed payments, or incorrect reporting—will be moved from quarterly to monthly GST reporting.
This shift is part of the ATO’s broader strategy to improve compliance and help struggling businesses manage their obligations more effectively. Monthly reporting can make it easier for businesses to stay on top of GST liabilities and avoid falling further behind.
What this means:

• Affected businesses will be notified directly by the ATO, along with their tax agents.
• The monthly reporting cycle will apply for at least 12 months as part of the ATO’s “Getting it right” campaign.
• Monthly reporting can help with cash flow by breaking GST payments into smaller, more manageable amounts, and encouraging more frequent reconciliation.

Businesses that have voluntarily switched to monthly reporting often find it aligns better with their accounting processes and improves their ability to manage obligations in real time.

​ATO Tightens Rules Around Payment Arrangements
The ATO has significantly increased scrutiny around deferred payment arrangements, making them harder to secure—especially if previous plans have defaulted.
Avoid Defaulting on Existing Plans
If you currently have a payment arrangement in place, it's critical to lodge and pay all Business Activity Statements and Income Tax Returns on time. Missing a due date—even once—can result in the ATO automatically cancelling your arrangement, with the full balance becoming immediately payable.
Act Early if You’re Struggling to Pay
If you think you may be unable to meet an upcoming payment, contact us or the ATO as soon as possible to explore your options. A proactive approach improves your chances of negotiating a new plan.
Don’t Ignore ATO Correspondence
ATO letters about outstanding tax debts should never be ignored. Failure to respond can lead to debt recovery action or legal proceedings. Maintaining clear communication and a good compliance history is essential.
Prevent Tax Debt from Arising
The most effective way to avoid ATO debt is by lodging and paying your BAS and tax returns on time. Keep in mind that late payments attract General Interest Charges, which accrue daily.

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If you're unsure whether these changes might apply to you, get in touch with us either by email at [email protected] or call us at (08) 9367 4199. We can help you get your records in order, set up better reporting systems, and make sure you're compliant moving forward.