Life gets busy, cash flow gets tight, and sometimes a business activity statement slips past its due date. If that's you right now, take a breath - a late BAS lodgement is a common situation, and in most cases it's straightforward to put right. Here's what actually happens when you lodge late, what it can cost, and the steps to take so a missed deadline doesn't turn into a bigger problem.
It helps to understand that lodging and paying are two different obligations, and the ATO can charge you on both fronts.
The first is the failure to lodge on time (FTL) penalty, which applies when you don't lodge your BAS by the due date - even if you have nothing to pay. The second is the general interest charge (GIC), which applies when there's an amount owing that you haven't paid by the due date. So you can be up for a penalty for lodging late, interest for paying late, or both.
There's some good news built into the system. The ATO has said it generally won't apply a penalty in isolated cases of late lodgement, and it will usually warn you by phone or in writing before a penalty is applied. It also generally won't issue an FTL penalty where your late BAS results in a refund or a nil balance - though there are exceptions, so this isn't something to rely on.
The FTL penalty is calculated in penalty units. The ATO charges one penalty unit for every 28 days (or part of that period) your BAS is overdue, up to a maximum of five penalty units.
From 1 July 2026, one penalty unit is $364. For a small business or sole trader, that means the penalty builds like this:
• Up to 28 days late: 1 unit = $364
• Up to 56 days late: 2 units = $728
• And so on, to a maximum of 5 units = $1,820
Larger entities are charged more. A medium entity - broadly, one with assessable income or GST turnover between $1 million and $20 million - has the penalty multiplied by two. A large entity, with turnover of $20 million or more, has it multiplied by five. For most small business owners, though, the base rate applies and the maximum exposure is $1,820 per late document.
If your late BAS also means you've paid the ATO late, the general interest charge applies to the outstanding amount. GIC is set quarterly and compounds daily. For the July to September 2026 quarter, the annual rate is 11.43%.
There's an important change worth flagging here. For interest incurred on or after 1 July 2025, GIC is no longer tax deductible. In the past you could at least claim a deduction for the interest the ATO charged you; that's no longer the case, which makes carrying an ATO debt more expensive than it used to be. It's a strong reason to clear any BAS liability as quickly as you can rather than letting it sit.
Most small businesses report GST quarterly. If your GST turnover is under $20 million, your quarterly BAS due dates are:
• Quarter 1 (July to September): 28 October
• Quarter 2 (October to December): 28 February
• Quarter 3 (January to March): 28 April
• Quarter 4 (April to June): 28 July
If you lodge online, you may be eligible for an extra two weeks. Lodging through a registered tax or BAS agent can also give you more time - one of the quieter benefits of having an accountant handle it for you. (Quarter 2 is the exception; its due date already includes a one-month extension, so no further online extension applies.)
If you report monthly, your BAS is due on the 21st day of the following month - a July BAS, for example, is due on 21 August. And if a due date lands on a weekend or public holiday, you have until the next business day.
If the deadline has already passed, the worst thing you can do is nothing. Take these three steps:
Lodge as soon as possible. The penalty is tied to how long the document is overdue, so every 28-day block you avoid keeps the cost down. Lodging also stops the situation escalating.
Pay what you can, or set up a payment plan. If you can't pay the full amount straight away, the ATO offers payment plans, and arranging one is far better than leaving the debt to accrue interest. You'll usually need to have lodged before you can sort out payment.
Talk to the ATO or your accountant. If something genuinely got in the way of lodging on time, it's worth raising early - the ATO is generally more understanding when you engage with them rather than going quiet.
If you've been hit with an FTL penalty, you can ask the ATO to remit (reduce or cancel) it. You'll need to have lodged the outstanding document first, then explain the circumstances that caused the delay.
The ATO says it's likely to remit a penalty where the delay was caused by things outside your control - a serious illness affecting you or someone you were caring for, a natural disaster, or not receiving information you needed from a third party despite genuine efforts to get it. It's unlikely to remit where the reason was being on holiday, being busy with work, or simply not receiving a reminder.
There's also a safe harbour provision worth knowing about. If you engaged a registered tax or BAS agent, gave them everything they needed to lodge on time, and the failure to lodge wasn't down to them being reckless or ignoring the law, you won't be liable for the FTL penalty at all. It's protection you only get when a registered agent is doing your lodgements.
The cheapest penalty is the one you never incur. A few habits make late lodgement far less likely:
• Keep your bookkeeping current through the quarter rather than scrambling at the deadline, so preparing the BAS is quick.
• Set reminders a couple of weeks before each due date to give yourself breathing room.
• Work with a registered BAS or tax agent, who can access extended lodgement dates and keep you on track.
This is where having the right accountant in your corner pays for itself. At Elevated Accounting, we handle BAS preparation and lodgement for small businesses across Melbourne and south-east Queensland, keep you ahead of your due dates, and step in early if a problem is brewing. As your small business accountant in Melbourne, we make sure lodgement is one less thing you have to think about.
A late BAS lodgement isn't the end of the world, but it can cost you - up to $1,820 in penalties for a small business, plus non-deductible interest on anything you owe. Act quickly, lodge and pay as soon as you can, and ask about remission if you have a genuine reason. Better still, put a system in place so it doesn't happen again.
If you've missed a BAS deadline, or you'd simply rather never have to worry about one, book a free initial consultation with Elevated Accounting and we'll help you get (and stay) on top of it.
