Quick answer
Catch up in this order: list what is overdue, gather records, lodge the oldest BAS first and work forward, lodge outstanding tax returns through a registered tax professional or software, check the resulting ATO balance, set up a payment plan if one is needed, then assemble your pack. Lodged paperwork turns an unknown ATO position into a known one, which is what lenders can work with.
Key points
- Unlodged paperwork makes your ATO position unknowable, which stalls files.
- Work oldest to newest and lodge before you worry about paying.
- Income tax returns cannot be lodged through online services for business.
- A plan for any balance, with evidence, finishes the repair.
- Order
- List, gather, lodge BAS, lodge returns, check, plan, pack
- Penalty basis
- Per 28 days overdue, capped at 5 penalty units
- Tools
- ATO online services for business; a registered agent
Why does lodging come before borrowing?
Because an unlodged BAS or return is a blank where a number should be. An assessor cannot tell what the ATO thinks you owe, cannot match turnover against the bank statements and cannot judge the business’s real trading. The blank itself is the problem, more than whatever number might fill it in.
Lodging replaces the blank with a fact. The fact might not be pleasant, but a known balance is something a lender can work with, and an unknown one is not. That is why the first move in the repair is not paying; it is lodging.
What is the catch-up order?
Seven steps, in this order.
| Step | Action | Notes |
|---|---|---|
| 1 | List everything overdue | Online services for business shows due dates and “for action” items |
| 2 | Gather records for each period | Bank statements, invoices, payroll, super |
| 3 | Lodge BAS, oldest first | Nil BAS are lodgeable online |
| 4 | Lodge outstanding income tax returns | Through a registered tax professional, compatible software or paper form |
| 5 | Check the resulting ATO balance | Download the account page |
| 6 | Set up a payment plan if needed | See the lender’s-view page |
| 7 | Assemble your pack | Include the evidence of lodgement |
Oldest first is a sensible default for BAS, because later periods often depend on earlier adjustments. If you use an agent, they will confirm the right order for your case.
How do I see what is overdue?
In ATO online services for business you can view lodgment due dates and “for action” items, and activity statement history for the last four years. For income tax returns, note one limitation: the ATO says income tax returns cannot be lodged through online services for business. You will need SBR-enabled software, a registered tax professional or a paper form.
That is why many owners with a backlog find an agent worthwhile. They can see your lodgment status and lodge returns that you cannot lodge yourself through the business portal.
Illustrative example. A landscaper is two BAS quarters and one tax return behind after a hard year. He lists the three items, hands his records to a BAS agent, and all three are lodged within a fortnight. The ATO account page then shows a modest balance, and he sets up a plan online. His pack now has lodged paperwork, a known balance and a plan schedule. Six weeks earlier it had none.
What about penalties?
The ATO charges a failure-to-lodge penalty based on penalty units: one unit for each 28 days or part of 28 days a document is late, capped at five, then multiplied for larger entities. The dollar value of a penalty unit is set separately, so check the ATO page for today’s amount. You can ask the ATO about remission in appropriate cases, and an agent can help you do it.
Do not let penalty anxiety stop you lodging. Every extra month of delay adds to the problem, while lodging now caps it.
What do I show a lender while the catch-up is in progress?
Progress. A lender is far more comfortable with a business that is part-way through a documented repair than with one that hasn’t started. Show:
- A list of what was overdue and what has been lodged.
- Lodgement receipts or the ATO history page.
- The agent’s name, if you have one.
- A plan schedule for any balance.
Then say plainly what remains and when it will be done. The ATO payment plans page sets out how plans read.
How do I stop it happening again?
Put lodgement dates into a rhythm. The ATO’s quarterly dates fall on the 28th of the month after the quarter (28 February for the December quarter). A twenty-minute monthly check, built from the monthly loan-ready routine, keeps the next backlog from forming. Year-end timing is covered in the EOFY guide.
What if I do not have all the records?
Gaps are common after a rough patch. Start with what you can get quickly: bank statements for every account, which the bank can provide for past periods, and invoices from your accounting software or your customers. Supplier statements can fill in purchases. Payroll records come from your payroll provider.
If records are genuinely missing for a period, tell your agent. They can use bank data to reconstruct the position, and explain the basis of any estimates. The ATO’s record-keeping guidance says records should be enough to determine the essential features of each transaction, and that is the standard to aim for. Reconstructing from statements is slower than keeping records as you go, but it is a normal part of catching up.
How do I know I have caught up?
Three signs. First, the lodgment list in online services for business shows nothing outstanding. Second, the account page shows a balance you recognise, even if it is not nil. Third, you can print the activity statement history for the last four years without gaps. When all three are true, take a dated copy of the account page and the lodgment history and put both in your pack. They are the best possible answer to the question an assessor most wants answered about your tax position.
Ready to lodge?
You do not need to finish the catch-up before asking what is possible. Send a free enquiry and tell the truth about what is overdue. It takes about a minute, leaves your credit file alone at this stage, and goes to one real person, not a crowd of lenders.
Accurate answers on the form let the first call lay out a realistic sequence: what to lodge first, what a lender will want to see and when it makes sense to put the full file together.
Frequently asked questions
Do I have to lodge everything before I can apply?
Not necessarily, but lodged paperwork makes the file much easier to read. If some items remain outstanding, say so, show what has been lodged and give the plan for the rest. A specialist can tell you how that is likely to be viewed.
Can I lodge a nil BAS?
Yes. The ATO's online services for business allow lodging of activity statements including nil BAS, so a quiet quarter can still be brought up to date.
Where can I see what is overdue?
Online services for business shows lodgment due dates and 'for action' items, and the activity statement history for the last four years.
How are late lodgement penalties worked out?
The ATO applies one penalty unit for each 28 days (or part) a document is overdue, capped at five units, then multiplies by entity size. The dollar value of a unit is set separately, so check the ATO page for the current amount.
Should I hire help?
If the backlog is more than a couple of items, a registered tax or BAS agent is usually worth it. They can lodge in the right order and talk to the ATO on your behalf.