BAS Lodged Late? Here’s What ATO Penalties Can Look Like (and How to Reduce the Damage)
- Feb 12
- 4 min read
Falling behind on your Business Activity Statement (BAS) can feel like a small delay that quickly turns into a bigger problem—especially once Australian Taxation Office (ATO) penalties and interest start stacking up. The impact isn’t just administrative: late lodgements can squeeze cash flow, create stress, and distract you from running the business.
The upside? If you act early, there are often practical ways to contain the damage—through quick lodgment, structured payment arrangements, and (in some situations) requests for penalty remission.
This guide breaks down what generally happens when BAS is late, how interest is applied if amounts remain unpaid, and what steps to take next - supported by practical accounting, taxation, and business advisory guidance from Symmetry Accounting & Tax Pty Ltd.
1) What happens when you lodge BAS late?
When your BAS is overdue, the ATO may apply a Failure to Lodge (FTL) penalty. In broad terms, the penalty is calculated using “penalty units” and increases based on how late the BAS is lodged, in 28-day increments, up to a cap.
A simple way to think about it
The longer the BAS is overdue, the higher the penalty.
Penalties can accumulate across multiple outstanding quarters/months.
For many small businesses, these penalties represent money that could have been reinvested into operations.
Example penalty amounts (illustrative)
The source article includes an example table showing how late-lodgment penalties can step up by overdue period, such as:
1–28 days late: $330
29–56 days late: $660
57–84 days late: $990
85–112 days late: $1,320
113+ days late: $1,650
Important: These figures can vary depending on the ATO’s penalty-unit value at the time and your entity’s classification. Treat them as a guide to how penalties may scale rather than a quote.
2) Lodged but not paid? Interest can still apply
A common scenario we see in practice is the BAS is lodged, but the payment can’t be made on time due to cash flow pressure. In that case, the ATO may apply a General Interest Charge (GIC) to the outstanding balance.
Key points:
GIC is generally calculated daily and compounds, so debts can grow the longer they remain unpaid.
Rates are updated periodically by the ATO; the source notes it often sits around a high single-digit annual rate.
The ATO is typically stricter on interest than people expect, and remission is usually considered only in limited circumstances.
From an accounting and taxation standpoint, this is why a “lodge now, deal with payment next” approach can still be the right move - because lodging delays can create extra penalties on top of the interest exposure.
3) Can the ATO waive or reduce late BAS penalties?
Sometimes, yes.
If you have a reasonable basis for the delay, you may be able to request penalty remission. The ATO commonly considers factors like:
serious illness or major disruption (including natural disasters)
technology or system issues that genuinely prevented lodgment
genuine mistakes followed by prompt corrective action
your compliance/lodgment history (a strong track record can help)
How remission requests are usually made
Depending on the situation, remission may be requested via:
the ATO’s online business services/portal,
by contacting the ATO directly, or
through your registered BAS/tax agent.
Business advisory tip: Remission requests are far more persuasive when supported by clear evidence (dates, documents, screenshots, medical notes where relevant, correspondence logs) and when you’ve demonstrated an effort to get compliant quickly.
4) What to do right now if you’re behind on BAS
If your BAS is overdue, speed matters. Here’s a practical triage plan we recommend:
Step 1: Lodge as soon as possible (even if you can’t pay yet)
Late lodgment is what triggers FTL penalties. Getting the BAS submitted quickly can stop the “late” clock from running further.
Step 2: Review the numbers before you press submit
If you’re rushing, it’s easy to create mistakes that cause bigger issues later (GST errors, PAYG withholding mismatches, incorrect fuel tax credits, coding problems). A quick review by your accountant can prevent a messy correction cycle.
Step 3: Contact the ATO early and discuss a payment arrangement
If payment is the blocker, engaging early can be the difference between a manageable plan and an escalating compliance issue. Many businesses can negotiate a structured plan based on realistic cash flow.
Step 4: Don’t ignore the issue
Silence rarely helps. Penalties and interest can accumulate, and unresolved lodgment issues can trigger additional ATO attention.
Step 5: Get help (especially if multiple BAS are outstanding)
If you’re behind across several periods, the fix is usually a “catch-up project”:
reconcile bank accounts,
verify GST coding,
correct prior misallocations,
finalise BAS in sequence,
and align the BAS position to year-end income tax reporting.
This is where strong business advisory support can reduce stress and prevent a repeat scenario.
5) How this connects to broader planning (including SMSF considerations)
While BAS is a business compliance obligation, the consequences can flow into bigger decisions - especially when cash flow is tight:
Should you restructure payment timing or revise pricing?
Do you need to revisit profit allocation or GST settings?
Are you drawing funds in a way that creates downstream tax pressure?
Do you need a cleaner separation between business and investment activities?
For clients who also manage retirement strategies through an SMSF, maintaining clean, timely reporting and strong cash flow controls can be part of a bigger, tax-effective plan. BAS problems don’t automatically involve your SMSF - but recurring compliance stress is often a signal that your overall structure, budgeting, and reporting rhythm needs improvement.
Key takeaway
The ATO takes BAS compliance seriously. Late lodgements can trigger FTL penalties, and unpaid balances can attract compounding interest charges. The best damage-control strategy is usually to lodge quickly, engage early, and seek remission where you have a genuine, supportable reason.
If you’d like help catching up on BAS, setting up a payment plan, or tightening your reporting so this doesn’t keep happening, Symmetry Accounting & Tax Pty Ltd can assist with practical accounting, taxation, and business advisory support - so you can get back to running the business with confidence.
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