ATO & TAX DEBT

BAS and GST debt

Lodging and paying are two separate obligations, and the gap between them is where most business tax debt is built. Here is how to close it, and how to fund the balance already sitting there.

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Is this you?

If any of these are true, we can help.

Talk it through

A business that has lodged every BAS on time and paid none of the last four.
An owner with unlodged periods and a growing suspicion that the number is worse than they think.
A company that spent the GST because it was in the account and the job needed materials.
A director who wants the BAS position cleared before it turns into a personal exposure.
A business whose pay-as-you-go instalments were set against a smaller year and are now building a shortfall.

How it works

Three moves, in plain words.

Get the records into one place
Bank statements, invoices, purchase records and the file for every unlodged period. Incomplete is fine to start with. Missing entirely is not.
Engage a registered tax agent
If you do not currently have one, this is the moment. A registered agent can see the account, has lodgement channels available to them, and knows how to sequence catch-up lodgements.
Lodge everything outstanding
All of it, oldest first, until the account reflects reality. Expect the total to be larger than your estimate. It usually is, and it is better known than guessed.

Bring us in while your accountant is catching up the lodgements.

Send us the numbers 1300 015 267

Lodging and paying are two different obligations

This is the single most useful thing on this page. Lodging a business activity statement and paying what it shows are separate duties, and they carry separate consequences. A business that lodges on time and cannot pay is in a materially better position than one that does neither.

Lodging on time keeps payment arrangements available and keeps your position visible and negotiable.
Lodging on time is also what keeps certain director exposures in their milder form. That distinction matters enormously if a notice ever arrives.
Not lodging does not delay the liability. It obscures it, and the ATO has its own ways of estimating what is owed when statements are missing.
Lenders assess what has been lodged. Unlodged periods make a business effectively unassessable, whatever its actual turnover.

The acronyms, plainly

BAS: The business activity statement. It reports GST, PAYG withholding and, where they apply, PAYG instalments for the period it covers.
GST: Goods and services tax collected on the invoices you issue and remitted to the ATO. It passes through the business rather than belonging to it.
PAYG withholding: Tax withheld from employees’ wages and held on their behalf until it is remitted. It carries director consequences that other liabilities do not.
PAYG instalments: Prepayments towards the current year’s income tax, set against an earlier year. Where the business has grown, the rate can build a shortfall quietly.
Integrated client account: The ATO account these liabilities sit on. The statement from it, rather than the figure carried around in your head, is what any arrangement or loan gets built on.

The detail

What happens when statements go unlodged

01The real position becomes unknown, to you as much as to anyone else. Decisions get made on a number nobody has verified.
02The ATO has mechanisms to determine an amount where statements are missing, and an estimated liability is not usually kinder than the real one.
03Failure to lodge on time can attract penalties in addition to the interest already running on the balance.
04Payment arrangements become harder to obtain, because there is no agreed figure to arrange payment of.
05Certain director exposures move into their stricter form where statements were not lodged within the required time.
06Finance stalls. No lender approves a file where the tax position cannot be established.

The fix is unglamorous and it works. Give your accountant everything, let them lodge every outstanding period, and accept that the resulting number will be uncomfortable for about a week. Then it becomes a problem with a size, and problems with a size can be funded.

What turns an unknown into a fundable number

Every unlodged quarter, lodged oldest first
The integrated client account statement
Six months of business bank statements
Two years of financials, where they exist

One verified balance an arrangement or a loan can be built on

Nothing on the right exists until everything on the left does. That is the real reason unlodged periods stall a finance file. It is not the size of the debt, it is the absence of a figure anybody can assess.

Document list only, and it varies by lender. The lodgement work itself is done by your registered tax agent, not by a broker.

View as a table

In	Out
Every unlodged quarter, lodged oldest first	One verified balance an arrangement or a loan can be built on
The integrated client account statement
Six months of business bank statements
Two years of financials, where they exist

GST is money you collected

Every invoice you issue with GST on it collects an amount that was never revenue. It sat in the trading account looking exactly like working capital, and it got spent on materials, wages and rent because it was there.

This is not a lecture. It happens to competent operators in profitable businesses, and it usually happens during growth, when the invoices are larger and the gap between paying suppliers and being paid is at its widest. It is a timing failure, not a character failure.

One quarter, split into what was earned and what was held

The smallest bar is the one that can become a director’s personal problem. It landed in the same account as the revenue, looked exactly like working capital for eleven weeks, and was never either.

Illustrative figures only. What actually sits in your account depends on your reporting method, your payroll and your credits, and that is a question for your registered tax agent. Not a quote and not an offer of credit.

View as a table

	Amount
Banked this quarter	$220,000
The business’s own revenue	$196,000
Held for the ATO: GST and PAYG withholding	$24,000

Why it changes the funding answer

It matters here for one practical reason. Because GST is collected rather than earned, the ATO treats it differently to an income tax debt, and so do lenders. A business with a GST shortfall is usually a business with a cash conversion problem, and the funding answer often needs to address both: clear the balance, and fix the gap that created it.

Catching up on lodgements

01
Get the records into one place
Bank statements, invoices, purchase records and the file for every unlodged period. Incomplete is fine to start with. Missing entirely is not.
02
Engage a registered tax agent
If you do not currently have one, this is the moment. A registered agent can see the account, has lodgement channels available to them, and knows how to sequence catch-up lodgements.
03
Lodge everything outstanding
All of it, oldest first, until the account reflects reality. Expect the total to be larger than your estimate. It usually is, and it is better known than guessed.
04
Establish the true balance
Pull the integrated client account statement once the lodgements have processed. That figure, not the one in your head, is what any arrangement or any loan gets built on.
05
Decide arrangement or finance, or both
With a verified number, the choice becomes real. A plan where cash flow supports it. Finance where it does not. Sometimes finance clears part of it and an arrangement covers the rest.

Quarters brought back into line one at a time, until the account finally shows the true figure. — The number at the end of this is usually larger than the estimate carried around beforehand. It is also the first number that anything else can be built on.

Order of lodgement: Oldest period first
Who lodges: A registered tax agent
The figure that counts: The account statement
Usual long pole: Finding the records
Bring us in at: Step two, not step five
Run in parallel: Lodgement and finance

Bring us in during step two rather than after step five. Building the finance file in parallel with the lodgement work usually saves several weeks, and it means the funding is ready the week the number is confirmed.

What carrying a BAS balance costs

Once a BAS liability is lodged and unpaid, the general interest charge starts running on the account. It compounds daily, the rate is set quarterly by the ATO, and it is published on ato.gov.au rather than quoted by brokers.

A lodged and unpaid balance against a funded one
Factor	Left on the ATO account	Refinanced into a facility
Interest	Compounds daily on the whole balance	Charged on a reducing balance
End date	None until it is paid	Fixed by the loan term
Deductibility	Restricted. Confirm with your tax agent	Interest on business borrowings is generally deductible
Escalation	Notices, disclosure, garnishee, director exposure	Ordinary lender arrears process
Next quarter	Adds on top, and the total compounds together	Sits on its own, against a cleared account

The last row is the one that decides most files. A carried BAS balance does not stay one quarter’s problem. It joins the next quarter’s, and the two compound as a single amount.

Funding a BAS or GST balance

Options for clearing the balance
Option	Suits	Worth knowing
ATO payment arrangement	Smaller balances with genuine cash flow behind them	No setup cost, but interest keeps compounding and conditions attach
Unsecured business loan	Moderate balances, strong recent turnover	Fast and shorter term, at a higher rate than secured lending
Refinance against property	Larger balances where equity exists	Cheapest and slowest. Property is on the line
Second mortgage	Where a good first mortgage is worth keeping	Priced above a first. Consent takes time
Invoice finance	Where the shortfall is caused by slow-paying debtors	Treats the cause rather than the symptom. Ongoing cost against margin
Asset refinance	A business owning plant or vehicles outright	Releases cash without touching the family home

Where a BAS balance keeps recurring, the answer is rarely a bigger loan. It is usually invoice finance or a working capital facility that closes the gap between doing the work and being paid for it, with a one-off refinance clearing what has already built up.

Worked example · illustrative

Clearing the balance and closing the gap

The situation: A trades business has lodged every statement and paid none of the last four. The balance is roughly $90,000, the work itself is profitable, and the largest customers pay on sixty-day terms.
The move: An unsecured facility clears the accumulated balance in one payment direct to the ATO. An invoice facility is arranged alongside it so the GST collected each month stops funding the wait to be paid.
Where it lands: The compounding stops, and the quarter after next has its own money set aside behind it. Where the debtor book will not support an invoice facility, the honest answer is a tighter cadence rather than a larger loan.

A composite example, not a specific client. Any figures are indicative and outcomes depend entirely on individual circumstances and lender assessment.

What a lender will ask for

The integrated client account statement or a portal printout showing the current balance.
The last several BAS lodgements, which double as evidence of turnover between financial years.
Two years of financial statements and tax returns where they exist, business and personal.
Six months of business bank statements, which is where an assessor looks for dishonours and for the real cash cycle.
Any ATO correspondence, including arrangement letters and notices. Send it even when it is unflattering.
Trust deed and amendments where a trust is involved, plus an ASIC extract for a company.
Details of any security property, including mortgage statements and the rates notice.

A cadence that stops it recurring

Every business we work with that has fixed this permanently did roughly the same four things. None of them are complicated.

01Move GST and PAYG withholding into a separate account weekly, at the same time as payroll. Not monthly, not at quarter end. Weekly.
02Reconcile monthly rather than at quarter end, so the BAS is a printout instead of an investigation.
03Review pay-as-you-go instalments with your tax agent whenever the business grows materially. An instalment rate set against a smaller year is a shortfall waiting to be discovered.
04Diarise a position review two weeks before each quarter falls due, with your accountant and your broker. If funding is needed, two weeks is enough time. Two days is not.

Here is the honest number.
The WeL’nd approach to a first meeting

Run the numbers

See it with your own figures.

Indicative only. Change anything — the defaults are starting points, not quotes.

Interest if nothing changes$16,748Over 24 months, at the GIC rate you entered

The balance as it stands

ATO balance owing

Integrated client account, income tax account, BAS arrears — the lot. Use the figure on your ATO portal today.

General interest charge rate

GIC is set quarterly by the ATO — check the current rate and enter it here. The figure shown is a placeholder, not a quote and not a statement of the current charge.

What you pay the ATO each month

If you are on a payment plan, use the plan instalment. If you are paying nothing, enter zero.

If it were refinanced instead

Refinance interest rate

A starting assumption for you to change, not a rate we are quoting. What you would actually be offered depends on the security, the lender and a full credit assessment.

Refinance term

Principal and interest over this many years. A longer term lowers the repayment and raises the total interest.

Compare over

Sets the window used by the bars in the results. All three windows are listed above them.

Other debts to consolidate with it

Most ATO files are not carrying the ATO alone. Add the cards, loans and overdrafts too and the refinance figure covers all of them.

Add a debt

Pick the closest type. It only sets the name — you fill in the numbers.

Interest over 24 months if nothing changes

$16,748

On $85,000 at 11.00%, paying $1,500 a month.

Interest over 24 months

Left with the ATO$16,748

Refinanced at the rate you entered$11,612

On these figures, refinancing costs about $5,135 less in interest over 24 months.

If the balance is not moving, the sooner someone reads the whole picture the more options are still open. Bring the portal figure and the last three months of trading.

Talk it through with a broker

The detail behind that number

Left with the ATO

Interest over 12 months: $8,900
Interest over 24 months: $16,748
Interest over 36 months: $23,420
Balance after 24 months: $65,748

Refinanced

Interest over 12 months: $5,838
Interest over 24 months: $11,612
Interest over 36 months: $17,320
Monthly repayment: $560
Balance after 24 months: $83,177
Paid off in: 30 years

One more thing worth knowing: the general interest charge is generally not deductible in the way interest on a business loan usually is. That difference can matter as much as the rate itself. It is a question for your registered tax agent, not for us — we are brokers, and we do not give tax advice.

Assumptions

The GIC rate and the refinance rate are figures you typed. Neither is a current rate, a comparison rate, or a lender product we are offering. The ATO resets the GIC every quarter — check it and enter today's figure.
The ATO general interest charge compounds daily. This tool compounds monthly as a reasonable approximation, so the real cost of leaving the balance where it is will be slightly higher than what you see here.
Your ATO payment is assumed to be the same amount every month, made on time, with no new BAS, PAYG or income tax liability added while the projection runs. In a trading business, new liabilities usually do get added.
The refinanced figure is principal and interest at a fixed rate over the term you chose, with equal monthly repayments and the full ATO balance drawn on day one.
Any other debts you add are rolled into the refinanced amount on day one and repaid over the same term at the same rate. Left as they are, each one is rolled forward month by month at the repayment you entered, exactly as the ATO balance is; where that repayment does not cover the interest, the shortfall is added to the balance each month and keeps charging.
No fees are included on either side: no ATO payment plan variation, no GIC remission, no establishment, valuation, legal, discharge, break or ongoing fees, no lender's mortgage insurance and no broker fee.
Nothing here models the tax treatment of any interest you pay. Deductibility depends on your circumstances and is a matter for your registered tax agent.
Results are rounded, and a lender using daily accrual will land on a slightly different number.

Open the full calculator

FAQ

Questions people actually ask

If yours is not here, ask it. We would rather answer the awkward one early than have you find out later.

1300 015 267

What happens if I lodge my BAS but cannot pay it?

The liability is recorded and the general interest charge begins running on the unpaid amount. You remain eligible to discuss a payment arrangement, and your position stays visible and negotiable. It is a considerably better place to be than not lodging at all.

What if I have not lodged for several quarters?

Get a registered tax agent involved and lodge everything outstanding, oldest first. The number will be larger than you expect. Once the account reflects reality you have a figure that an arrangement or a loan can be built on, and until then nothing else can move.

Can I get a loan to pay a BAS debt?

Yes, through the same secured and unsecured lending used for any tax balance. The lender will want lodgements current, evidence of the balance, and the debt paid direct to the ATO at settlement. Approval is always subject to that lender’s assessment.

Does unpaid GST become a personal liability?

GST is among the obligations that can be pushed onto directors personally through a director penalty notice, and whether the milder or the stricter form applies turns substantially on whether statements were lodged within the required time. Your accountant or a solicitor is the right person to advise on your specific position.

Is it better to get a payment arrangement or refinance?

It depends on the size of the balance and the strength of your cash flow. An arrangement costs nothing to set up but the interest keeps compounding and conditions attach to it. A refinance costs something upfront and gives you a fixed term with an end date. We will tell you honestly when the arrangement is the better option.

How is interest calculated on an unpaid BAS?

The general interest charge is applied to the account balance and compounds daily, with the rate reset quarterly by the ATO. Do not take a rate from any broker or website, including this one. It is published on ato.gov.au and it changes.

My BAS debt keeps coming back every quarter. What is wrong?

Almost always the cash conversion cycle rather than profitability. The work is done and invoiced, the GST is collected, and it is spent covering the gap before the customer pays. Invoice finance or a working capital facility usually treats that better than a larger term loan does.

Can I claim the GST I have not yet paid to the ATO?

How GST is reported and when credits can be claimed depends on your reporting method and your circumstances. That is a question for your registered tax agent rather than for a broker, and getting it right matters more than getting it quickly.

Will a BAS debt stop me getting a home loan?

It complicates the assessment and some lenders will decline outright, particularly where lodgements are behind. Others will proceed where the debt is cleared at settlement or where lodgements are current and trading is sound. This is exactly where knowing lender appetite before applying saves a wasted enquiry.

How quickly can this be sorted out?

The lodgement catch-up is usually the long pole, and it depends on your records and your accountant’s capacity. The finance side typically runs a few weeks for a secured facility from complete documents. Running both in parallel rather than in sequence is the single biggest time saving available.

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Get the real number, then a plan

Bring us in while your accountant is catching up the lodgements. We will build the finance file alongside them so the funding is ready the week the balance is confirmed.

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