ATO and administration
ATO
The ATO is the Australian Taxation Office, the federal government agency that administers GST, income tax, PAYG, superannuation compliance and the Australian Business Register.
The ATO is the Australian Government's main revenue collection agency. When business owners talk about the tax office, they mean the ATO. It administers the GST, income tax, PAYG withholding and instalments, fringe benefits tax, luxury car tax, wine equalisation tax and a range of other taxes. It also oversees compliance with the superannuation guarantee and manages the Australian Business Register, which holds ABN and GST registration details.
For a small business, most dealings with the ATO involve three activities. The first is registering, which includes applying for an ABN, TFN and GST registration if required. The second is reporting, which usually means lodging a Business Activity Statement and an annual income tax return. The third is paying, which covers GST amounts, PAYG withholding, instalments and super. The ATO provides online services, phone lines and written guidance for each of these.
The ATO does not administer every tax in Australia. Payroll tax, stamp duty, land tax and workers compensation are matters for state and territory revenue offices and regulators, while council rates are collected by local councils. These vary by location, so a business in one state may have different obligations from a business in another. The ATO also does not set tax policy, since the law is made by Parliament, and the Treasury advises the government on policy.
The ATO also has compliance functions. It can conduct reviews and audits, issue assessments, apply penalties and interest, and recover debts. It publishes rulings and guidance that explain how it interprets the law. Taxpayers have rights, which are set out in the Taxpayers' charter, including the right to be treated fairly, to be given reasons for decisions and to object to certain decisions.
The ATO publishes extensive information on its website, which many small business owners find useful, including calculators, checklists and step-by-step guidance. It also runs services aimed specifically at small business. However, ATO general guidance is not the same as personal tax advice. For advice based on your own circumstances, you may want to consult a registered tax agent or BAS agent, who is regulated by the Tax Practitioners Board.
Be careful about scams. Scammers often pretend to be the ATO by phone, text or email, threatening arrest or demanding payment through unusual methods like gift cards or cryptocurrency. The ATO does not do this. If you are unsure, do not use contact details in the message. Find the ATO's real contact details yourself, or contact it through your online services account.
This page is general information only. Confirm how matters apply to you with the ATO or a registered tax professional.
Worked example
A new sole trader with expected sales of $120,000 a year contacts the ATO through online services. They apply for an ABN, register for GST as their GST turnover is over $75,000, and set up quarterly BAS. In the first quarter they collect $4,400 in GST on sales and claim $1,100 in credits, so they pay the ATO net GST of $3,300 by the due date.
Practical tips
- Use the ATO's own online services or contact details, and be suspicious of unexpected calls, texts or emails demanding payment.
- Remember payroll tax, stamp duty and land tax are state matters, not ATO matters.
- Treat ATO general guidance as a starting point and get personal advice for complex situations.