Small Business Stewardship Group key messages 6 March 2025

Setting the scene – Small Business Stewardship Group in 2025

The ATO sought member feedback on the draft Small Business Stewardship Group (SBSG) charter to ensure it reflects the group’s purpose and intent.

Members suggested the removal of the word ‘registry’ in defining the role of the group. Additionally, the charter should reflect that accountability and expectations are a mutual obligation for the ATO and members. Members proposed wording for consideration. The charter should also acknowledge the diversification of stakeholders within the small business ecosystem.

Members reflected on the group’s commitments, activities, and achievements in 2024. Members valued deep dives, which provided the opportunity to consider and discuss topics in greater detail and assisted members to communicate the ATO's approaches within their networks. Members also noted that information on key achievements resulting from group input would assist them when engaging with their networks.

Members shared topics they would like to discuss in 2025 to gain insights into the issues faced by small businesses, including:

• small business resilience, including education and support at the macro level, natural disasters, and digital resilience to micro issues that affect an individual's health and wellbeing
• the value of community and supporting business leaders to become the voice within their community
• debt payments and the remittance of interest, including clarity on how the ATO applies discretion
• the value of intermediaries
• the role of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
• micro small businesses, including available support and resources like the Department of Employment and Workplace Relations' self-employment assistance programExternal Link
• Payday Super.

The chairs advised they will continue to champion and support members to table items of interest to them and their networks.

Frontline – Small business priorities for 2025

The ATO provided an update on lodgment and payment activity and the support available for small businesses experiencing difficult circumstances.

Collectable debt

The majority of small businesses lodge and pay their tax on time. For small businesses with a debt, almost half of the debt is less than 12 months old. The current collectable tax debt is trending down, including small business collectable debt. While all tax owed should be paid, the ATO is acting faster to recover super guarantee, pay as you go (PAYG) withholding and GST.

Support for small businesses

As part of the ATO’s Vulnerability Framework, the ATO is focused on identifying and supporting taxpayers, including small businesses, where difficult circumstances impact the ability to meet tax obligations.

For information on how the ATO can help those experiencing difficult times, see Support in difficult times.

Concessional arrangements

The ATO is committed to ensuring a clearly defined and consistent posture regarding concessional arrangements to support lodgment and payment, such as interest and penalty remission. The ATO will seek members' input in the coming months.

The ATO acknowledged feedback that there should be more transparency about when we are likely to accept a small business restructuring proposal and committed to provide more information to the group.

Member comments

Members observed that the ATO needs to promote positive activity within the small business community, particularly on compliance, and highlighted that most small businesses pay on time.

Small businesses may worry that lodging will trigger a debt, which can lead to them developing a habit of non-lodgment.

Members also expressed concerns that changes to general and shortfall interest charge deductibility, and super guarantee charge penalty calculation, create obstacles for small businesses seeking to bring their tax affairs into order.

Small business 'getting it right' engagement

The ATO shared early insights from the Quarter 2 campaign, which aims to support small businesses get things right from the start, and the focus areas for the upcoming Quarter 3 campaign.

Key insights from Quarter 2

Business income is not personal income, with a focus on Division 7A. The ATO has worked with partner agencies to update ATO web content, run webinars, and implemented ‘myth busting’ sessions, with positive results.

In December 2024, the ATO sent prompts to approximately 1,500 self-preparers encouraging them to review their non-commercial loss claims. So far, 20% have acted to self-amend their returns.

In late February 2025, the ATO sent approximately 15,000 nudge messages to taxpayers who appear to be in the ride-sourcing industry but have not registered for GST. Within the first few weeks, 10% have registered, and this number is expected to increase.

Member comments

Members supported the use of prompts, noting they help to raise the profile of these key issues.

Focus areas for Quarter 3

Focus areas for Quarter 3 include helping businesses build better habits. The ATO will use the Commissioner of Taxation's discretionary power to move approximately 3,500 small businesses with a history of non-compliance from quarterly to monthly GST reporting. This change is based on stakeholder insights from pilots and engagements and will support affected businesses to get back on track. Impacted businesses and their registered tax agents will be notified in mid-March, and the new reporting cycle will take effect on 1 April 2025.

The ATO provided an overview of indicators used to identify small businesses with a history of non-compliance. These indicators are not linear and include the following behaviours:

• a history of late and non-payment of tax obligations
• a history of lodging late or not meeting lodgment obligations
• tax debts associated with incorrect reporting
• incidence of defaulting on payment arrangements
• having already received firmer action warning letters or other firmer action communications from the ATO.

This approach will potentially increase touch points with the ATO, enabling better support for businesses to get back on track.

Member comments

The ATO reassured members that the number of small businesses moved to a monthly GST reporting cycle is limited to 3,500. Members suggested the ATO be more transparent on the affirmative action being taken, as this will alleviate concerns around the extent to which small businesses will be considered to have a history of not complying with tax obligations.

Members expressed uncertainty about the effectiveness of a campaign asking disengaged small businesses to engage with the ATO more regularly. Members noted that increasing frequency of engagement will increase compliance costs, both in time and money, and may result in further dis-engagement. Trusted sources like the small business community, industry networks, and intermediaries, rather than the ATO, should explain the benefits of monthly reporting.

Additionally, the timing of communicating the decision is concerning. Small businesses should be provided with more time to implement necessary changes to their business processes, including engaging with their registered tax agent.

The ATO thanked members for their feedback, which will be considered as part of the learnings process. The ATO will closely monitor the campaign to assess its benefits and impacts. Insights will be used to refine future campaigns.

Operating outside of the system

In late February 2025, the ATO launched a nudge campaign to approximately 5,000 sole traders. It compared what was reported in their 2023 tax return using myTax with data from the Taxable payments annual report. The ATO encouraged those with missing or incorrect amounts to self-amend. The ATO will use the insights from this campaign to design a future sole trader experience that leverages data to reduce inadvertent mistakes or omissions.

Small business boost measures

If the ATO believes a boost measure has been incorrectly claimed, it may contact the small business or their tax agent and encourage them to amend their tax return. The ATO clarified that this campaign targets those recipients who were never eligible for the boost and provided incorrect information.

The ATO will engage with members throughout 2025 on the small business ‘getting it right’ engagement campaign.

Non-agency member updates

Members were invited to share what they are hearing within their communities, industries and broader network.

Small business advocates

Small business advocates noted various and disjointed lodgment and payment dates and cycles confuse taxpayers.

Recent state and federal law changes are increasing reporting requirements and administrative costs, creating an on-going burden for small businesses.

Advocates are apprehensive about the Tax Agent Services Act 2009 (TASA) and how it might affect tax agents.

There is interest in the outcome of the Bendel case in the Full Federal Court and how it might influence the ATO’s treatment of trusts and Division 7A, as many businesses use these structures.

Advocates highlighted the need for consistency in how the ATO responds to interest remission requests and the importance of these decisions in assisting debt repayment.

They also raised the challenge of keeping track of PAYG instalment notices which arrive through multiple channels.

Members raised concerns about the Australian Business Register not being up to date, making it unclear who the authorised contact is for a business. Additionally, there is currently no way to substantiate who is an authorised contact for a not-for-profit organisation.

Professional associations and industry groups

There is concern about the potential impact on small businesses if tax law is amended to deny deductions for ATO interest charges. While the intent is to ensure a level playing field for those paying on time, it is unclear whether this outcome would be achieved.

Members expressed frustration that the instant asset write-off for small business entities for 2024–25 has not been passed into law before the federal election.

The Australian Chamber of Commerce and Industry (ACCI) is working on an education program on women in business and will engage with members on the program's content. The ATO will work with ACCI to include the education program on a future SBSG agenda.

Members raised concerns about inconsistencies in the notification process for PAYG instalment notices. Some clients are informed directly while others are only notified through their myGov account, with no prompt to look.

Vulnerable community specialists

The Small Business Debt Helpline acknowledged increased demand for their services from those with an ATO debt, compared to a financial institution debt.

Members thanked the ATO for the education and support opportunities provided to small businesses at a workshop in western Sydney late in 2024.

Members expressed concerns the government's redefining of an Indigenous business will create uncertainty for Indigenous small business owners and their supply chains. Parts of the new definition are still unclear, but advocates want it to include 51% ownership, management, and control. However, the current proposal excludes ‘control’.

Small business operators

A member noted they were having trouble with ATO online system to nominate an agent and link identification to an Australian business number.

• Post meeting update: The ATO worked with the member to resolve this issue.

Small business representatives acknowledged things are tough. Global and macroeconomic factors, including agricultural tariffs, are creating uncertainty within industries.

Members raised concerns about low business confidence, cashflow, an alarming level of insolvencies, and fears of inadvertently underpaying employees.

Agency member updates

Treasury

Treasury is actively monitoring the cyclone and associated flooding in southern Queensland and northern New South Wales to inform the government's assistance and support to affected communities.

The National Small Business StrategyExternal Link has been released. It is a non-binding, principles-based document that outlines how governments will work together to support Australian small businesses.

ATO

The Not-for-profit self-review return went live on 1 July 2024. The first lodgment was due by 31 October 2024, however the ATO extended the lodgment period to 31 March 2025.

The ATO is working with Fair Work Ombudsman and Department of Home Affairs to investigate labour hire providers suspected of unlawful conduct in the agriculture industry.

Australian Small Business and Family Enterprise Ombudsman

The ASBFEO has participated in government-led consultations on merchant card payment fees and surcharge fees.

The quarterly ASBFEO Small Business PulseExternal Link report was released in February 2025.

Small business needs to be front of mind of our policy makers in the lead up to the federal election. The ASBFEO has proposed 14 steps to boost more support to Australia’s small businessesExternal Link.

Attendees

Attendees list

Organisation	Attendee
ATO	Will Day (Co-chair), Small Business
ATO	Andrew Watson, Individuals and Intermediaries
ATO	Angela Allen, Small Business
ATO	Anna Longley, Frontline Risk and Strategy
ATO	Claire Miller, Enterprise Solutions and Technology
ATO	Emma Rosenzweig, Superannuation and Employer Obligations
ATO	Kath Philip, Marketing and Communication
ATO	Michael Morton, Small Business
ATO	Tony Poulakis, Small Business
Australian Chamber of Commerce and Industry	Jodie Trembath
Australian Retailers Association	Ben Cornel
Australian Small Business and Family Enterprise Ombudsman	Bruce Billson (Co-chair)
Chartered Accountants Australia and New Zealand	Karen Liew
Council of Small Business Organisations Australia	Adele Sutton
Direct Selling Association of Australia	Nina Rossi
Indigenous Business Australia	Chris Germain
Institute of Certified Bookkeepers	Matthew Addison
Institute of Public Accountants	Tony Greco
Real Estate Institute of Australia	Jock Kreitals
Restaurant and Catering Industry Association	Suresh Manickam
Small Business Debt Helpline	Helen Davis
Small Business Operator	Donna Niazov
Small Business Operator	Lisa Dwyer
Small Business Operator	Paul Meissner
Small Business Operator	Tony Sama
Small Business Operator	Shannon Smit
Supply Nation	Kate Russell
Treasury	Bede Fraser
Treasury	Robyn Beutal
UNSW Tax & Business Advisory Clinic	Ann Kayis-Kumar

Guest attendees

Guest attendees list

Organisation	Attendee
ATO	Emma Tobias, Small Business
ATO	Travis Deane, ATO Corporate
ATO	Vlad Dugandzic, Small Business

Apologies list

Apologies list

Organisation	Member
ATO	Elissa Walker, Enterprise Solutions and Technology
Australian Automotive Aftermarket Association	Lesley Yates
Rural Doctors Network	Richard Colbran
Australian Veterinary Association	Moss Siddle
Small Business Operator	Angela Harlen
Treasury	Anthony Seebach