On 11 February 2026 the ATO issued a media release urging small businesses to get a handful of basics right before compliance action becomes necessary. Assistant Commissioner Angela Allen’s message was direct: fix your record-keeping, report all income including cash, stop dipping into GST and PAYG withholding to fund cash flow and start preparing for payday super.
The numbers behind the warning
Two figures explain the tone. The small business income tax gap sits at $27.2 billion and the ATO is chasing more than $50 billion in collectable debt. When the gap and the debt book are that large, more scrutiny of small business is the predictable result.
The release named specific focus areas: the cash economy; property and construction; and the private use of business assets. If your business sits in one of those categories, assume your reporting will be looked at more closely this year.
Holding tax money is not a cash flow strategy
The warning about GST and PAYG withholding deserves particular attention. Money you collect for GST and the tax you withhold from wages is not yours. Using it to plug cash flow gaps is one of the most common paths into serious ATO debt.
Carrying that debt is also dearer than it used to be. General interest charge incurred on or after 1 July 2025 is no longer tax-deductible and the GIC rate is 10.65% for the January to March 2026 quarter. An ATO debt at 10.65% with no deduction attached is expensive money by any standard.
The better pattern is simple to describe, even if it takes discipline to run: provision for GST, PAYG withholding and super separately as you go, so the money is there when the BAS or super payment falls due.
The Small Business Superannuation Clearing House is closing
If you pay super through the Small Business Superannuation Clearing House, put a date in the diary. The SBSCH closed to new users on 1 October 2025 and shuts permanently at 11:59pm on 30 June 2026.
The ATO has flagged February to March 2026 as the window to migrate to another solution and to download your transaction history before the service closes. Do not leave this until June. Choosing a replacement, testing it and keeping your records intact all take longer than expected when payroll deadlines are also in play.
Payday super is coming
Payday super has been law since November 2025 and starts on 1 July 2026. The ATO’s message is to prepare now rather than discover the gaps in your payroll process after the start date. Talk to your bookkeeper or payroll provider about what changes for your pay runs and what it means for your cash flow timing.
What to do now
- Get your lodgments current. Outstanding BAS and tax returns are the first thing the ATO sees.
- Set up separate provisioning for GST, PAYG withholding and super.
- If you already have ATO debt, talk to the ATO early about a payment plan rather than ignoring it. Silence is what triggers firmer action.
- Start your payday super preparation now.
- If you use the SBSCH, migrate to another solution and download your transaction history before 30 June 2026.
Before you act
This article is general information only and is not tax or financial advice. Your situation will have details that change the answer. Confirm lodgment, debt and super obligations with a registered tax agent before acting on anything here.