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ATO Ramping Up Penalties for Late BAS Lodgement and Payment

The Australian Taxation Office (ATO) is significantly tightening its approach to late lodgement and payment of Business Activity Statements (BAS).

With higher penalties and compounding interest now firmly in focus, it’s essential for businesses to understand the financial consequences of missing BAS deadlines.


Penalties for Late Lodgement of BAS

If your BAS is not lodged by the due date, the ATO may apply a Failure to Lodge (FTL) penalty. This penalty depends on the size of your business and how long the BAS remains outstanding.


Small Entities (annual turnover under $1 million)

  • Penalty: 1 penalty unit per 28-day period (or part thereof) overdue, up to 5 units

  • 2024–25 value: 1 penalty unit = $313

  • Maximum penalty: $1,565


Medium Entities (annual turnover $1 million–$20 million)

  • Penalty: 2 penalty units per 28-day period (or part thereof) overdue, up to 10 units

  • Maximum penalty: $3,130


Large Entities (annual turnover $20 million+)

  • Penalty: 5 penalty units per 28-day period (or part thereof) overdue, up to 25 units

  • Maximum penalty: $7,825


Interest on Late BAS Payments

Businesses that fail to pay BAS liabilities on time will incur the General Interest Charge (GIC).

  • Calculated daily on outstanding balances

  • Compounded until the debt is cleared

  • Rate formula: 10-year Treasury bond rate + 7%

  • Current ATO GIC rate: 11.38% p.a.


How to Avoid ATO BAS Penalties

  • Lodge on time: Even if there’s nothing to report, lodge a nil BAS to avoid automatic penalties.

  • Communicate early: If you can’t lodge or pay by the deadline, contact Collins Hume or the ATO before the due date to arrange a deferral or payment plan.

  • Stay organised: Use reminders, cloud accounting software or ATO online services to stay on top of deadlines.


Why the ATO Is Increasing Enforcement

The ATO has stated it is placing a stronger emphasis on BAS compliance. Businesses with a history of late lodgements will face reduced leniency and an increased likelihood that penalties will not be remitted.


Take Action Now

To reduce the risk of penalties and interest:

  • Lodge every BAS on time, even nil returns

  • Seek assistance from Collins Hume if you are falling behind

  • Set automated reminders for due dates

  • If bookkeeping is becoming overwhelming, we can connect you with a reliable bookkeeper to keep your records up to date.


For full details, visit the ATO’s guidance on Failure to Lodge on Time Penalty »


If you’re concerned about BAS deadlines or want help staying compliant, speak with the Collins Hume team on 02 6686 3000 today.

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