Additional support is available for new small business owners to ensure they understand and comply with their tax, super and registry obligations from the start.

The Australian Tax Office’s campaign was launched in May, and is coined ‘ready for business’ - highlighting that opening and running a small business is ‘serious business’.

The ATO said about 50 per cent of businesses fail in the first three years, often because they don’t get their ATO obligations right when starting their small business journey.

In the coming months, Australian business number (ABN) holders will receive a series of emails from the ATO which include tips on ABN obligations, business structures, registering for goods and services tax (GST) and understanding employer responsibilities.

ATO deputy commissioner Will Day said the goal of the program is to arm small businesses with the tools so they can “focus on growing their business with confidence”.

“Small businesses are vital participants in the tax and super system. As stewards for small businesses, our role in making it easy for small business owners to get their tax and super right is more important than ever.

“Through transparent communication, including the support we have available for small businesses, small business owners are better equipped to keep up with their obligations and stay on top of their tax payments. After all, small business is serious business.

“The ATO’s role is to collect the correct amount of tax so the government can deliver services for the Australian community.”

Mr Day said the ATO knows while most small businesses try to do the right thing and comply with their ATO obligations, there are some making genuine mistakes and others deliberately not complying.

Following are some of the identified areas.

Don’t get caught out by GST

The ATO said GST registration and payment is an ongoing area of concern.

It estimates that the community is missing out on almost $8 billion in GST each year, which hasn’t been collected due to non-compliance. Small businesses contribute significantly to this gap.

Not every small business needs to be registered for GST, but when their GST turnover is $75,000 or more or when they provide taxi, limousine or ride-sourcing services they must register and collect GST and then pay this to the ATO.

Small businesses who don’t understand their GST obligations can often be caught out when it comes time to pay.

Mr Day encouraged small businesses to set aside GST, as well as pay as you go (PAYG) withholding and super if they have employer obligations.

“Don’t be tempted to dip into GST, PAYG withholding or super to manage your cash flow – set up separate bank accounts for these funds so you’re always prepared when it’s time to pay.”

Side hustles in the spotlight

More than 700,000 taxpayers are supplementing their income with ‘side hustles’ including ‘gig’ or sharing economy activities.

If your hobby has turned into a profit-making business, you are responsible for certain tax, super and registry obligations.

“Generally, a business involves continuous and repeated activities aimed at making a profit. Visit ato.gov.au/areyouinbusiness to learn more about whether your activities qualify as a business and understand your obligations,’ Mr Day said.

ATO's 'ready for business' campaign aids new small businesses

The ATO is also encouraging new small businesses to plan ahead to avoid a large tax bill when they lodge their first tax return.

To prevent this, new small business owners can voluntarily enter and prepay their estimated tax liability through PAYG instalments as soon as they start their business.

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Thursday, 15th May 2025

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