The June-quarter BAS is due on 28 July. For a lot of trade and service businesses that lands at the worst possible moment: the end of a quiet winter quarter, a couple of big invoices still unpaid, and a GST bill that reflects the work you invoiced rather than the money you actually collected.
The instinct, when the money isn't there, is to say nothing. Don't lodge, don't call, don't open the letter, and hope something lands before anyone notices. I understand the instinct. It is also, reliably, the most expensive decision available to you, and since 1 July last year it has become meaningfully more expensive than it used to be.
Lodging and paying are two separate things
This is the part most owners don't realise, and it's the single most useful thing in this article.
Your obligation to lodge the BAS and your obligation to pay it are separate. You can lodge on time and pay late. A business that lodges on 28 July and pays in September is in a completely different category to a business that does neither: the first one has a known debt and a conversation to have, the second one has a failure-to-lodge problem stacked on top of a payment problem, and it has told the ATO, in the only language the ATO reads, that it is not in control of its books.
Lodging also keeps your options open. Payment plans, remission requests, and the general goodwill that comes with being a compliant taxpayer with a temporary cash problem all depend on the paperwork being in. Silence closes doors that were open on the 28th.
So: lodge, always, on time, even if the payment can't go with it. If you use a registered tax or BAS agent you get more room here anyway — the concessional date for the June quarter through an agent is 25 August, and self-lodgers who lodge online get to 11 August. Confirm your own date with your agent or the ATO rather than assuming, but the general shape is that using an agent buys you close to a month.
What late payment actually costs now
The ATO charges the general interest charge on unpaid tax debt. It compounds daily, and for the quarter starting 1 July 2026 the ATO's published annual GIC rate is 11.43 per cent.
Eleven and a half per cent is already dearer than most business overdrafts. But the important change is what happened on 1 July 2025. Under the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025, which received Royal Assent in March 2025, GIC and shortfall interest charge incurred on or after 1 July 2025 are no longer tax deductible. They used to be. They aren't now.
That sounds like accountant trivia. It isn't. It changes the maths on every dollar of ATO debt you carry.
Interest on a business loan is generally deductible, so a chunk of the cost comes back to you at tax time. GIC no longer does. Which means a debt sitting with the ATO at 11.43 per cent non-deductible is materially more expensive, in real after-tax dollars, than borrowing at a similar headline rate from a lender where the interest is deductible. For years the ATO was, unofficially, the cheapest and laziest line of credit in small business. That is no longer true, and a lot of owners are still running on the old assumption.
Gold nugget. If you are carrying ATO debt and also have unused capacity on a business loan or facility, sit down with your accountant and compare the two properly, on an after-tax basis, not on the headline rate. Since GIC stopped being deductible, refinancing a tax debt into ordinary business borrowing can leave you genuinely better off — because interest on borrowings connected to your business is generally still deductible, and GIC isn't. It is not automatic and it depends on your circumstances, so get advice on your own numbers. But it's a five-minute question almost nobody thinks to ask, and for a business sitting on a five-figure BAS debt it is worth real money.
The payment plan conversation
If the money genuinely isn't there, ring before the due date, not after. The ATO offers payment plans, and small businesses can often set one up themselves online for smaller debts. What matters is the shape of what you propose.
Go in with three things: the amount, a specific instalment you can actually meet, and a date the debt clears. "I can do $1,800 a fortnight starting 8 August and it's clear by the end of November" is a plan. "Things are tight, can I have some time" is not. And be conservative with the instalment. The worst outcome is agreeing to a number that sounds impressive, defaulting in week three, and burning the credibility you'd need to renegotiate. A plan you meet is worth more than a plan that looks good.
Note that GIC still accrues while you're on a payment plan. A payment plan buys you time and it stops the enforcement escalation. It does not make the debt free.
The actual problem is upstream
Here's the uncomfortable part. A BAS you can't pay is almost never a BAS problem. It's a cash problem that shows up on BAS day because that's the day someone finally asks for money you already spent.
The GST on an invoice was never yours. You collected it on the ATO's behalf and it sat in your trading account looking exactly like revenue, funding wages and materials and a ute payment for eleven weeks, until the twelfth week arrived and the money had to come from somewhere. Every business that gets caught by a BAS has spent the GST. Not dishonestly — just invisibly, because there is nothing in a standard bank account that distinguishes the ATO's money from yours.
The fix is boring and it works: a second bank account. On the day money hits, move the GST portion, and your PAYG withholding, straight out of the trading account into a separate one you never touch. Some owners do it weekly, some at the end of each day's takings. The mechanism doesn't matter. What matters is that by 28 July the money is already sitting there, and BAS day stops being an event.
The other half of the fix is seeing it coming. A 13-week cash flow forecast puts the BAS on the calendar as a line item eight or ten weeks out, alongside your super and your wages, which means you find out in May that July is tight, while you still have options — chase debtors harder, stage a purchase, adjust the payment run. Finding out on 28 July gives you no options at all. That's the whole difference between a business that manages tax and a business that gets managed by it.
If a big part of the squeeze is money owed to you rather than money you've spent, the problem is on the collection side, and that's a different fix — one worth reading about in what to do when a client doesn't pay.
What to do this week
Lodge by the 28th, whatever the bank balance says. If you can pay, pay. If you can't, call the ATO before the due date with a specific instalment and a clear-by date. Ask your accountant whether refinancing the debt makes sense now that GIC isn't deductible. Then open the second bank account before the September quarter starts, so this is the last time you read an article like this one.
If you've been caught by BAS day more than once, the BAS isn't the issue — the way money moves through the business is. That's exactly what we pull apart in the Trade Business Health Check: a fixed-price review of your numbers, your pricing and your cash cycle, with a written plan of what to fix first. Or start with the free Business Health Scorecard if you'd rather see where you stand before you talk to anyone.