Ha – ha you can’t see me
You think that if you don’t sign your BAS the ATO can’t see you or know you owe them a BAS and some money….
Nah! It doesn’t work like that.
So here is what is on the sword of Damascus if you use this tactic.
If a business in Australia fails to lodge its Business Activity Statement (BAS), the Australian Taxation Office (ATO) can take several actions, including imposing penalties and interest charges. Here are some of the consequences:
1. Failure to Lodge (FTL) Penalty
The ATO can impose a Failure to Lodge (FTL) penalty. The amount depends on the size of your business and how late the BAS is lodged. The penalty units increase the longer the BAS remains outstanding.
And those amounts can build up quickly.
2. General Interest Charge (GIC)
If there is an amount payable on the BAS, the ATO will charge interest on the unpaid amount. This is known as the General Interest Charge (GIC), which accrues daily.
And those amounts can build up quickly.
3. Estimated Assessments
If you don’t lodge your BAS, the ATO may issue an estimated assessment based on their data, which might not reflect your actual liability. You will be required to pay this estimated amount.
And here is the kicker, we can then lodge but they will want their estimate not the new lodged amount – ok you would want to challenge that – do you know how much it costs to go to the federal court.
4. Directors’ Penalty Notice (DPN)
For companies, the ATO can issue a Directors’ Penalty Notice (DPN) to hold directors personally liable for unpaid amounts such as GST, PAYG withholding and superannuation guarantee charge.
But here is the kicker – When you get DPN you usually have 3 weeks to do something – if you were late with lodgement then its usually a lockdown, which means you are immediately liable.
5. Legal Action
In extreme cases, the ATO can take legal action to recover outstanding debts. This might include garnishee notices (which direct third parties to pay money directly to the ATO) or even winding up the business.
But here is the kicker – non-lodgement is a criminal offence. We really see this, but when it comes the ATO wants to make a example out of you.
6. Impact on Future Interactions
Non-compliance can affect your business’s ability to negotiate payment plans or deferments with the ATO in the future.
Its easier to talk to the ATO after lodging and getting a deal than not lodging. No matter what you hear in the press the ATRO is talking to us about our clients and what we can do for them.
7. Restriction on Government Benefits
Failure to comply with tax obligations can affect eligibility for government grants, loans, or other financial assistance.
We have often seen family benefits and other government payments stopped while lodgements are completed. That can really throw you when you rely on these allowances to support the family.
What to Do If You Haven’t Lodged Your BAS
Talk to us.
Timely and accurate lodgement of your BAS is crucial to maintaining a good standing with the ATO and ensuring the smooth operation of your business, even if you struggle.
Talk to us.
Wee are here with accountants and consultants to see how your business could give you more. If the profit increases, and you have better money management a lot of pressure and stress can come off.
Talk to us.
