What Happens If You Lodge or Pay Your BAS Late: Penalties, Interest, and Remedies

Introduction

The Business Activity Statement (BAS) is the primary mechanism for Australian businesses to report and pay their GST, PAYG withholding, and other tax obligations. Missing the lodgment or payment due date can trigger automatic penalties and interest charges from the Australian Taxation Office (ATO). This article provides a comprehensive overview of what happens when you lodge or pay your BAS late, including the specific penalties, the General Interest Charge (GIC), how to apply for remission, and practical strategies to avoid these consequences.

Whether you are a sole trader, a small business owner, a bookkeeper, or an importer, understanding these rules is essential to managing your cash flow and maintaining a good compliance record with the ATO.

BAS Lodgment and Payment Due Dates

The ATO sets specific due dates for lodging and paying your BAS. These depend on your reporting cycle:

Note: If the due date falls on a weekend or public holiday, the due date is the next business day. The ATO also offers a deferred due date for certain taxpayers who lodge through a registered tax agent or BAS agent – typically an extra month for quarterly lodgers.

Penalties for Late Lodgment

If you fail to lodge your BAS by the due date, the ATO may impose a failure to lodge (FTL) penalty. The penalty is calculated as a fixed amount per 28-day period (or part thereof) that the BAS is overdue, up to a maximum of five periods (i.e., 140 days).

The base penalty amount depends on your business size:

For example, a small business that lodges a quarterly BAS 60 days late (two 28-day periods) would face a penalty of $550. The maximum penalty for a single BAS is five periods: $1,375 for small businesses, $2,750 for medium, and $5,500 for large.

Expert Tip: The ATO may remit (waive) the FTL penalty if you have a reasonable excuse, such as a natural disaster, serious illness, or reliance on incorrect advice from the ATO. You must apply for remission in writing.

General Interest Charge (GIC) for Late Payment

If you pay your BAS debt after the due date, the ATO charges General Interest Charge (GIC). GIC is a compound interest rate calculated daily on the outstanding amount. The rate is set quarterly and is based on the 90-day bank bill rate plus a margin. As of the current quarter, the GIC rate is approximately 11.36% per annum (check the ATO website for the latest rate).

GIC applies from the day after the due date until the debt is fully paid. It is not a fixed penalty but an interest charge that can accumulate quickly, especially for large debts.

Example: A business owes $10,000 in GST and pays 30 days late. At an annual GIC rate of 11.36%, the daily interest is about $3.11. Over 30 days, the GIC would be approximately $93.30.

How to Lodge or Pay Late

If you have missed the due date, you should still lodge and pay as soon as possible to minimise penalties and interest. Here are the steps:

1. Lodge online via the Business Portal, myGov, or through your registered tax agent. The ATO accepts late lodgments without prior approval.
2. Pay online using BPAY, credit card, direct debit, or the ATO’s payment portal. If you cannot pay the full amount, consider setting up a payment plan (see below).
3. Apply for remission of penalties and GIC if you have a reasonable excuse. Use the ATO’s online form or write to them explaining the circumstances.

Warning: Ignoring a late BAS will not make it go away. The ATO will eventually issue a default assessment and may take recovery action, including garnishee notices or legal proceedings.

Remission of Penalties and GIC

The ATO has discretion to remit (cancel) both the failure to lodge penalty and the General Interest Charge in certain circumstances. Common grounds for remission include:

• Natural disaster or pandemic (e.g., bushfires, floods, COVID-19)
• Serious illness or hospitalisation of the taxpayer or a close family member
• Incorrect advice from the ATO
• System failure or technical issues beyond your control
• Reliance on a registered tax agent who failed to lodge on time (though the agent may also face penalties)

To apply, you must provide evidence and explain why the delay was not due to wilful neglect. The ATO will assess each case on its merits. For GIC remission, the ATO is generally more lenient if you have a good compliance history and have taken steps to pay.

Impact on GST Registration and Activity Statements

Repeated late lodgment or payment can affect your GST registration status. The ATO may:

• Cancel your GST registration if you fail to lodge for an extended period (e.g., 12 months)
• Issue a default assessment estimating your GST liability, which you must then dispute or pay
• Increase scrutiny on future BAS lodgments

For importers, late payment of GST on imported goods can also lead to delays in customs clearance and additional penalties from the Department of Home Affairs.

Consequences for Directors and Businesses

For companies, directors can be held personally liable for unpaid GST and other BAS debts under the Director Penalty Notice (DPN) regime. If a company fails to pay its BAS debt within 21 days of the due date, the ATO can issue a DPN, making directors personally liable. This applies to GST, PAYG withholding, and other amounts reported on the BAS.

Directors can avoid personal liability by ensuring the company lodges and pays on time, or by appointing a voluntary administrator or liquidator within the 21-day window.

Common GST Mistakes to Avoid

• Missing the due date – Set calendar reminders and use the ATO’s due date calculator.
• Incorrectly reporting GST credits – Ensure you only claim credits for GST-inclusive purchases that relate to your enterprise.
• Failing to reconcile BAS with accounting records – Discrepancies can trigger audits.
• Not lodging a nil BAS – Even if you have no activity, you must lodge a nil BAS to avoid penalties.
• Ignoring ATO correspondence – Respond promptly to any notices about late lodgment or payment.

GST Calculator & Tools

Use the GST Calculator Suite on gstcalculatorau.com to quickly determine GST amounts, reverse GST, and estimate your BAS liability. Here’s a step-by-step guide:

1. Visit gstcalculatorau.com and select the GST Calculator tool.
2. Enter the total amount (including or excluding GST) and the GST rate (10% for most goods and services).
3. Click Calculate to see the GST component and the base amount.
4. Use the Reverse GST Calculator to find the original price before GST.
5. For BAS preparation, use the BAS Calculator to estimate your net GST payable or refundable.

Our searchable database also provides specific GST treatment for thousands of goods and services, helping you classify transactions correctly.

Conclusion

Lodging or paying your BAS late can lead to significant financial penalties, interest charges, and even personal liability for directors. The best strategy is to stay organised, use digital tools to track due dates, and lodge and pay on time. If you do miss a deadline, act quickly to minimise the damage and consider applying for remission if you have a valid reason. For accurate GST calculations and up-to-date information, rely on the resources at gstcalculatorau.com.