Falling behind on your Business Activity Statement (BAS) lodgments can be stressful, especially when the Australian Taxation Office (ATO) issues penalties. Whether it’s a missed deadline or an unpaid balance, the consequences can affect your cashflow and put unnecessary pressure on your business. The good news is the ATO provides options to help businesses catch up and, in some cases, request penalty remissions if you have a reasonable explanation.
What happens if you lodge your BAS late?
When a BAS is lodged late, the ATO applies a Failure to Lodge (FTL) penalty. This penalty is calculated in “penalty units” and is based on how late your lodgment is.
The ATO applies one penalty unit for every 28 days your BAS is overdue, up to a maximum of five units.
That means your late lodgment could attract penalties such as:
For small businesses, that’s money that could have gone straight back into operations — which makes staying on top of lodgment dates even more important.
Interest Charges on Unpaid BAS
If you’ve lodged your BAS but haven’t paid the amount owing, the ATO applies a General Interest Charge (GIC) on the outstanding balance.
The GIC is calculated daily and compounds, which means the longer your BAS remains unpaid, the more the debt grows. While the ATO publishes updated rates quarterly, the charge typically sits around 8–10% per year.
The purpose of the GIC is to encourage timely payment, but it can quickly add up if you’re experiencing cashflow issues. The ATO is generally strict about applying this charge, and remission is only considered in very limited circumstances—such as death, disability, or a natural disaster that results in the loss of records.
Can You Apply for Penalty Remissions?
Yes — if you have a valid reason for missing a BAS deadline, you may be able to request a penalty remission. The ATO considers:
- Serious illness or natural disasters that affected your ability to lodge.
- Delays caused by technology issues or unexpected system outages.
- Genuine mistakes where you acted promptly to fix the error.
- Your lodgment history (businesses with a good track record are more likely to be granted remission).
You can apply for a remission through the ATO Business Portal, by calling the ATO, or by asking your registered tax or BAS agent to submit a request on your behalf.
What to Do if You’re Behind on BAS
If you’ve missed a BAS deadline, here are some steps to take immediately:
- Lodge your BAS as soon as possible — even if you can’t pay right away.
- Contact the ATO to discuss your situation. In many cases, they’ll allow you to set up a payment plan.
- Keep communication open — ignoring the problem can escalate penalties and even trigger compliance action.
- Seek help from your accountant or BAS agent if you’re unsure how to manage late lodgments.
By acting quickly, you can minimise penalties and interest charges while showing the ATO that you’re committed to resolving the issue.
Key Takeaway
The ATO takes BAS lodgments seriously, and missing deadlines can result in Failure to Lodge penalties and interest charges. However, businesses that fall behind aren’t without options. By lodging as soon as possible, setting up payment arrangements, and applying for remissions where appropriate, you can get back on track and protect your business from unnecessary financial stress.
About Chan & Naylor
Since 1990, Chan & Naylor has partnered with business owners and property investors in managing their taxes and building tax-effective wealth. Choosing Chan & Naylor means you’re not just selecting a service provider; you’re gaining a partner aligned with your financial goals. You’ll have access to a dedicated client manager supported by a team of accountants that specialises in business and property tax.
Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investment.
