Behind on BAS and tax returns? A catch-up order that works

Nobody plans to fall behind on lodgements. It happens in the gaps: a bookkeeper leaves, a hard quarter makes the numbers unpleasant to look at, the business grows faster than the admin. Then the backlog itself becomes the reason not to start, because every overdue period feels like it might hide a bill.

The good news is that catching up is a known process with a sensible order. And every lodgement you complete improves your position with the ATO and with lenders.

Why lodge now, even without the money to pay?

The ATO is direct about this. Its guidance for businesses that can’t lodge or pay on time says to lodge on time even if you can’t pay, and to phone before the due date if you can’t lodge, to reduce the risk of a penalty. Three reasons make that more than good manners:

Reason	What’s at stake
Penalties	The failure-to-lodge penalty is one penalty unit for each 28 days, or part, a document is overdue, up to five units, multiplied for medium and large withholders
Directors	Under the director penalty rules, if PAYG withholding, GST or super guarantee charge isn’t reported within three months of the due date, the only way to have a director penalty remitted is to pay in full
Options	Formal options such as small business restructuring require required tax returns and documents to be lodged before a plan is proposed

Lodging turns a vague worry into a real number. The number may be uncomfortable, but you can plan around it. You can’t plan around a guess.

Step 1: Make the list

Before lodging anything, find out exactly what’s outstanding. Your tax agent can pull this from the ATO’s systems, or you can check through Online services for business. List:

• every activity statement period not lodged;
• every income tax return not lodged, for each entity;
• any PAYG withholding or payment summary obligations;
• any super guarantee shortfalls;
• any other returns, such as fringe benefits tax, if they apply.

Put it in a single table with due dates. It’s the map for everything that follows. Share it with your accountant and keep it updated as each item is lodged, so you can see the backlog shrinking. That visible progress matters more than it sounds when the list is long.

Step 2: Activity statements first

Most accountants start with BAS, for good reasons:

1. They carry GST and PAYG withholding, which drive director penalty exposure. Getting them reported limits the damage.
2. They’re shorter and faster than income tax returns, so progress is visible quickly.
3. They give the ATO accurate figures, which can replace estimates and default assessments.

Work from the oldest to the newest, or as your agent advises, but get them all in.

Step 3: Check super

Super guarantee shortfalls carry their own charge and feed director penalties too. And since 1 July 2026, the Fair Work Ombudsman notes that employers must pay super so it reaches employees’ funds within seven business days of paying wages. A catch-up is a good time to make sure your payroll is set up for the new timing, so you don’t create a fresh backlog while clearing the old one.

Step 4: The latest income tax return

Once activity statements and super are in hand, lodge the most recent income tax return next, even if older ones are still outstanding. It’s the one lenders care about most, because it shows current profit. It also helps your accountant see where the business stands today.

Step 5: Work back through older returns

Then clear the remaining years, usually newest to oldest. If records are thin for some periods, your accountant can often rebuild figures from bank statements, invoices and supplier records. Start collecting statements early.

If you’d like to know what funding might be available while you work through the backlog, start a 60-second enquiry. There’s no credit check when you first enquire.

How should I handle the ATO during the catch-up?

• Tell the ATO what you’re doing, ideally through your tax agent, with a realistic timetable.
• Keep new periods current as you go. A catch-up that falls further behind each quarter never finishes.
• Ask about remission of penalties and interest where there are good reasons. Your agent can make the request.
• Plan for the bill. Once everything is lodged, the balance becomes clear. A payment plan, or a loan that pays the ATO out, can follow. Our page on business loans with ATO debt covers the loan side.

For larger balances, be aware of the ATO’s credit reporting rules. Our guide to ATO debt on your credit report explains the $100,000 and 90-day thresholds and the 28-day notice.

How do lodgements change your borrowing options?

Directly, and quickly:

Lodgement position	Typical finance options
Several years behind	Mainly property-secured lending from specialist lenders
BAS current, returns behind	Property-secured, and some unsecured lenders sizing on bank statements
Everything current	The widest range, including better-priced specialist options and a path back to banks

Property-secured business loans run from $20,000 to $5,000,000 and can often be assessed without up-to-date financials, leaning on the property and your repayment plan. If you already have a bank loan over the property, a second mortgage behind it may fund the catch-up and the tax bill without disturbing it. Unsecured options, typically $5,000 to $500,000, are sized on turnover and bank statements. More detail is on our page about borrowing with overdue lodgements.

What will my accountant need from me?

The faster you provide records, the faster the catch-up. Expect to be asked for:

• business bank statements for every outstanding period, for every account;
• sales records or invoices, and supplier bills;
• payroll reports, including super paid and when;
• loan and finance statements, including any equipment finance;
• details of assets bought or sold;
• any ATO letters, notices or payment plans.

If some records are missing, say so early. It’s normal, and a good accountant has ways to rebuild figures from what exists.

How long does a catch-up usually take?

It depends on how far behind you are, how good the records are and how quickly you respond to questions. A few quarters of BAS with tidy bank statements can be done in weeks. Several years of returns with patchy records can take months. Agree a timetable with your accountant, share it with the ATO, and treat the dates as seriously as you’d treat a customer deadline.

Illustrative example: eighteen months to current

Illustrative only, not a real client. A Canberra building-services company fell six quarters behind on BAS and two years behind on income tax returns after its long-time bookkeeper retired. The directors engage a new accountant, who lists every outstanding item and lodges the activity statements first, over about six weeks.

With the BAS lodged, the ATO balance is clear. The directors use a second mortgage over a director’s home to pay it in full, removing their director penalty exposure. The latest tax return follows, then the older ones. Within eighteen months the company is fully current and refinances to a lower-cost facility.

Catching up? Let’s fund the gap while you do.

Late lodgements are one of the most common things we see, and the real picture is always more useful than a hopeful one. The enquiry takes a minute and carries no credit check when you first enquire. Nothing gets spread around the market, and a specialist calls to plan funding that fits your catch-up timetable.

Please be accurate about what’s outstanding and your plan to catch up. It’s exactly what the right lender needs to hear. See if you qualify →