Falling behind on your BAS (Business Activity Statements) or tax returns is more common than you might think -especially for small business owners juggling multiple responsibilities. The good news? It’s fixable, and the sooner you act, the better the outcome.

In this guide, we’ll walk you through how to handle overdue BAS and tax returns, minimise penalties, and get back on track with the ATO.

What Happens If Your BAS or Tax Return Is Overdue?

If you miss your lodgement deadlines, the ATO may apply:

• Failure to Lodge (FTL) penalties
• General Interest Charges (GIC) on unpaid amounts
• Increased scrutiny on your business

The longer the delay, the higher the risk of penalties and compliance issues.

Step 1: Don’t Ignore It

Ignoring overdue BAS or tax returns will only make things worse. The ATO is generally more lenient with taxpayers who take proactive steps to fix the issue.

Even if you can’t pay immediately, lodging your returns is the first priority.

Step 2: Gather Your Financial Records

To lodge overdue BAS or tax returns, you’ll need:

• Bank statements
• Sales and income records
• Expense receipts
• Payroll data (if applicable)
• Previous BAS or tax lodgements

If your records are incomplete, an accountant in Australia can help reconstruct your financials.

Step 3: Catch Up on Bookkeeping

Accurate bookkeeping is essential before lodging:

• Reconcile your bank accounts
• Categorise income and expenses
• Ensure GST is correctly recorded

This step ensures your BAS and tax returns are accurate and compliant.

Step 4: Lodge Your Overdue BAS and Tax Returns

Once your records are in order:

• Lodge all outstanding BAS statements
• Submit any overdue income tax returns

You can do this yourself, but working with a registered tax agent often gives you:

• Extended lodgement deadlines
• Reduced risk of errors
• Better handling of ATO communication

Step 5: Manage or Reduce ATO Penalties

If you’ve fallen behind, you may still have options:

• Request penalty remission (especially if you have a valid reason)
• Set up a payment plan with the ATO
• Work with an accountant to negotiate on your behalf

Many small businesses successfully reduce penalties by engaging early.

Step 6: Set Up a Plan Going Forward

Once you’re caught up, the goal is to stay compliant:

• Use accounting software (e.g. Xero, MYOB, QuickBooks)
• Schedule regular bookkeeping (weekly or monthly)
• Set reminders for BAS and tax deadlines
• Work with a Sydney accounting firm for ongoing support

Common Mistakes to Avoid

• Waiting until multiple years are overdue
• Lodging inaccurate BAS just to “get it done”
• Ignoring ATO notices
• Not separating personal and business finances

When Should You Get Help?

If you have:

• Multiple overdue BAS or tax returns
• Missing or messy records
• ATO debt you can’t manage

It’s best to seek professional help. An accountant can streamline the process and deal with the ATO on your behalf.