Falling behind on your Business Activity Statement (BAS) lodgements can feel overwhelming — particularly when the Australian Taxation Office (ATO) begins to apply penalties and interest. For small business owners already juggling cash flow, a missed BAS deadline or unpaid GST can snowball into a bigger financial problem if not addressed quickly.
The good news? The ATO offers pathways to help businesses catch up and, in some cases, avoid or reduce penalties. This guide explains how BAS late penalties work, what interest charges you might face, and what steps you can take to stay compliant.
What Happens if You Lodge Your BAS Late?
When your BAS is lodged after the due date, the ATO may apply a Failure to Lodge (FTL) penalty. This penalty is calculated in penalty units — and the longer the delay, the more units you’ll owe.
- 1 penalty unit is applied for every 28-day period (or part thereof) that your BAS is overdue.
- A maximum of 5 penalty units can be applied per late BAS.
As of July 2025, the value of one penalty unit is $330. That means a maximum penalty of $1,650 could be applied for a single late BAS.
These penalties can quickly eat into operating capital — funds better spent on growth or wages. Staying on top of lodgement dates is a simple but critical part of financial health.
Interest Charges on Unpaid BAS Amounts
Even if you’ve lodged your BAS on time, if you haven’t paid the amount owing, the ATO will charge General Interest Charge (GIC) on the outstanding balance.
- GIC is calculated daily and compounds over time.
- The interest rate typically sits around 8–10% per annum, although this is adjusted quarterly. For example, the GIC rate for the September 2025 quarter is 10.46% annually or 0.02865% daily.
This interest can grow quickly, especially if you’re experiencing cash flow difficulties.
The ATO is strict when it comes to GIC — remissions are only considered in very limited situations, such as:
- Natural disasters
- Serious illness
- Systemic issues beyond your control (e.g., ATO system outages)
Can You Apply for Penalty or Interest Remissions?
Yes. The ATO allows businesses to request a remission of penalties or interest charges — but you’ll need to provide a reasonable explanation and, ideally, have a good lodgement history.
The ATO will consider:
- Serious illness or natural disasters
- Technology issues that prevented timely lodgement
- Genuine mistakes where you acted quickly to fix the problem
- Past compliance (a clean record increases your chances)
You can apply for a remission:
- Via the ATO Business Portal
- By calling the ATO directly
- Through your registered tax or BAS agent
What to Do If You’re Behind on Your BAS
If you’ve missed a BAS deadline, act fast. Here’s what you should do:
- Lodge your BAS ASAP, even if you can’t pay the full amount right away.
- Contact the ATO to explain your situation — you may be eligible for a payment plan.
- Keep the lines of communication open. Ignoring ATO notices can result in escalated penalties or compliance action.
- Seek help from your accountant or BAS agent. They can advise on your options and may be able to negotiate on your behalf.
Tips to Avoid BAS Penalties
To stay compliant and protect your business from financial stress:
- Use accounting software that sends reminders before BAS is due (e.g., Xero, MYOB).
- Mark BAS due dates in your calendar — generally the 28th day after the end of each quarter.
- Outsource to a BAS agent or bookkeeper if lodging yourself is too time-consuming.
- Keep cash flow reserves for upcoming tax obligations.
- Stay informed by subscribing to ATO small business newsletters or updates.
The ATO takes BAS lodgement and payment seriously — and late penalties or interest can impact your bottom line. But small businesses aren’t without options. If you fall behind:
- Lodge as soon as possible
- Contact the ATO for a payment arrangement
- Apply for penalty remissions if there are valid reasons
Staying on top of your BAS is not just about avoiding fines — it’s about maintaining control of your business finances and reducing stress.
Useful Resources:
Source: ATO
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