Behind on lodgments? The order to fix them in
Do not wait until you can pay everything. First stop new obligations becoming overdue, then establish and lodge the backlog in a controlled order.
1. Confirm what is actually outstanding
Start with ATO online services or your registered tax agent's lodgment program. List every income tax return, BAS, taxable payments annual report, fringe benefits tax return and superannuation guarantee statement that appears outstanding. Check whether a return not necessary notification is appropriate for any period rather than assuming nothing is due.
Separate missing lodgments from unpaid debts. They are related but different problems. Until the returns are lodged, neither you nor the ATO has a reliable total for the liability.
2. Keep current obligations current
Create a firewall around new due dates. Reconcile the current quarter, process payroll correctly and lodge the next BAS on time while the older work is being rebuilt. Otherwise the backlog keeps growing faster than it can be cleared.
If a current deadline cannot be met because of an exceptional or unforeseen event, ask about a deferral before the due date. A deferral is not automatic and does not erase an existing overdue position.
3. Rebuild the records in dependency order
Bank and payroll records usually come first because later reports depend on them. Reconcile sales, expenses, GST, PAYG withholding, wages and super. Then prepare BAS periods in chronological order so opening balances and corrections flow forward consistently.
Complete the annual accounts and income tax returns after the underlying activity statements and payroll data are coherent. For a group, identify which entity's records feed another entity's return, such as a trust distribution or partnership share, and finish the source entity first.
4. Lodge even if payment will need a plan
Not lodging does not make the debt smaller. It can add failure-to-lodge penalties, leave directors exposed to escalation for company obligations, and prevent a realistic payment proposal. Lodge accurate documents as soon as they are ready and keep evidence of any estimates or corrections.
The ATO applies general interest charge to unpaid amounts and may take firmer action where a taxpayer refuses to engage, ignores reminders or repeatedly defaults on plans. Early contact gives more room to explain the position and propose something sustainable.
5. Deal with debt, penalties and future cash flow
Once the liability is known, prepare a cash flow that includes new tax as it falls due plus an affordable amount for the arrears. A payment plan that consumes all available cash and fails at the next BAS is not a solution.
Failure-to-lodge penalties can be remitted in full or part in appropriate circumstances. A request should explain the cause of the delay, the steps taken to fix it and the plan for staying compliant. Remission is discretionary, so do not build the recovery plan on the assumption it will be granted.
The order in one line
Inventory the obligations, protect current deadlines, reconstruct the source records, lodge the backlog in dependency and date order, then negotiate the debt with a forecast that keeps future obligations current. If a company has overdue PAYG withholding, GST or superannuation guarantee obligations, obtain advice promptly because director penalty rules can make delay much more serious.
Primary sources
Rules and lender requirements change. These sources were checked when this article was published.
This article is general information current at the date of publication. It doesn't take your circumstances into account and isn't tax, legal or financial advice. Speak to a registered tax agent about your situation.
