As the 2026 financial year gains momentum, now is the time for Australian business owners to review their Business Activity Statements and ensure they are not missing out on valuable GST credits and fuel tax credits.

With ongoing cost pressures, cashflow constraints and increased compliance scrutiny, leading commentary in the Australian Financial Review continues to highlight the importance of disciplined financial management and working capital optimisation. One of the simplest ways to improve business cashflow is to claim every credit you are legally entitled to, on time and correctly.

Understanding GST Credits: Claim What You’re Entitled To

What Are GST Credits?

GST credits, also known as input tax credits, are the GST amounts you have paid on business purchases that you can claim back through your Business Activity Statement.

If you purchase goods or services for your business and the price includes GST, you can generally claim that GST amount as a credit to reduce the amount you owe to the Australian Taxation Office.

For many businesses, these credits represent a significant and ongoing cashflow benefit.

Who Can Claim GST Credits?

To claim GST credits, you must:

• Be registered for GST
• Purchase goods or services for business use
• Have been charged GST by the supplier
• Hold a valid tax invoice for purchases over $82.50 including GST

You cannot claim GST credits for personal expenses or purchases that are not directly related to running your business.

The Four-Year Time Limit: Don’t Let Credits Expire

A critical but often overlooked rule is the four-year time limit. GST credits expire four years after the due date of the BAS for the period in which you first could have claimed them. Once that window closes, the entitlement is lost. Reviewing historical BAS lodgements within the four-year window is a practical way to strengthen cashflow without increasing revenue. A structured review of prior periods can uncover missed credits and correct underclaims.

Fuel Tax Credits: A Powerful but Underused Benefit

What Are Fuel Tax Credits?

Fuel tax credits allow eligible businesses to claim back the fuel tax (excise) included in the price of fuel used in business activities.

If your business uses fuel in eligible vehicles, machinery or equipment, you may be able to claim credits on your BAS.

This can be particularly valuable for:

• Construction businesses
• Transport operators
• Primary producers
• Mining and heavy industry businesses
• Businesses using generators or heavy equipment

Eligibility and Registration Requirements

To claim fuel tax credits, you must:

• Be registered for GST
• Register specifically for fuel tax credits
• Use eligible fuel for eligible business activities

Not all fuel use qualifies.

For example:

• Fuel used in passenger vehicles or light vehicles travelling on public roads is generally not eligible due to the road user charge.
• Heavy vehicles and off-road machinery may qualify at different indexed rates.

Fuel tax credit rates are indexed twice a year and vary depending on the type of fuel and activity. Given the complexity, professional advice is often critical to ensure correct calculation and compliance.

The Four-Year Rule Also Applies

Like GST credits, fuel tax credits are also subject to a four-year time limit from the BAS due date for the period when the credit could first have been claimed.Failing to review eligibility within this timeframe can result in permanently lost refunds.

BAS Accuracy and Cashflow Strategy in 2026

Recent business coverage in the Australian Financial Review has focused heavily on working capital management, rising operating costs and the importance of strong governance practices. Accurate BAS preparation is a core part of that governance.

Your BAS is not simply a compliance form. It is a financial checkpoint that reflects:

• GST collected
• GST paid
• PAYG withholding
• PAYG instalments
• Fuel tax credits

Treating BAS lodgement as a strategic cashflow review rather than a last-minute compliance task can materially improve financial outcomes.

Should You Amend a Past BAS or Claim Now?

If you identify missed GST or fuel tax credits, you may be able to:

• Correct the error in a later BAS, subject to correction limits
• Lodge an amendment for the original BAS period

The appropriate approach depends on the size of the adjustment and ATO correction thresholds.

A registered tax agent can assess:

• Whether your fuel use qualifies
• Which credit rates apply
• Whether amendments are required
• How to minimise compliance risk

Start the Year Right: Review Before It’s Too Late

Do not leave BAS reviews or credit assessments until deadlines are looming.

By proactively reviewing:

• Historical GST credits
• Fuel tax credit eligibility
• Tax invoices and documentation
• Prior BAS lodgements within the four-year window

You may unlock cashflow that is already sitting within your business records.In a tighter economic environment, optimising entitlements can be just as valuable as increasing revenue.

Conclusion: Protect Your Cashflow and Stay Compliant

As 2026 unfolds, disciplined BAS management is more important than ever. GST credits and fuel tax credits are legitimate entitlements designed to support Australian businesses, but they come with strict eligibility rules and time limits.

By reviewing your position early, ensuring documentation is in order and seeking professional advice where necessary, you can strengthen cashflow, reduce compliance risk and avoid leaving money with the ATO that rightfully belongs to your business.

A proactive BAS strategy is not just about compliance. It is about smart financial management.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Falling behind on your Business Activity Statement (BAS) lodgements can feel overwhelming — particularly when the Australian Taxation Office (ATO) begins to apply penalties and interest. For small business owners already juggling cash flow, a missed BAS deadline or unpaid GST can snowball into a bigger financial problem if not addressed quickly.

The good news? The ATO offers pathways to help businesses catch up and, in some cases, avoid or reduce penalties. This guide explains how BAS late penalties work, what interest charges you might face, and what steps you can take to stay compliant.

What Happens if You Lodge Your BAS Late?

When your BAS is lodged after the due date, the ATO may apply a Failure to Lodge (FTL) penalty. This penalty is calculated in penalty units — and the longer the delay, the more units you’ll owe.

• 1 penalty unit is applied for every 28-day period (or part thereof) that your BAS is overdue.
• A maximum of 5 penalty units can be applied per late BAS.

As of July 2025, the value of one penalty unit is $330. That means a maximum penalty of $1,650 could be applied for a single late BAS.

These penalties can quickly eat into operating capital — funds better spent on growth or wages. Staying on top of lodgement dates is a simple but critical part of financial health.

Interest Charges on Unpaid BAS Amounts

Even if you’ve lodged your BAS on time, if you haven’t paid the amount owing, the ATO will charge General Interest Charge (GIC) on the outstanding balance.

• GIC is calculated daily and compounds over time.
• The interest rate typically sits around 8–10% per annum, although this is adjusted quarterly. For example, the GIC rate for the September 2025 quarter is 10.46% annually or 0.02865% daily.

This interest can grow quickly, especially if you’re experiencing cash flow difficulties.

The ATO is strict when it comes to GIC — remissions are only considered in very limited situations, such as:

• Natural disasters
• Serious illness
• Systemic issues beyond your control (e.g., ATO system outages)

Can You Apply for Penalty or Interest Remissions?

Yes. The ATO allows businesses to request a remission of penalties or interest charges — but you’ll need to provide a reasonable explanation and, ideally, have a good lodgement history.

The ATO will consider:

• Serious illness or natural disasters
• Technology issues that prevented timely lodgement
• Genuine mistakes where you acted quickly to fix the problem
• Past compliance (a clean record increases your chances)

You can apply for a remission:

• Via the ATO Business Portal
• By calling the ATO directly
• Through your registered tax or BAS agent

What to Do If You’re Behind on Your BAS

If you’ve missed a BAS deadline, act fast. Here’s what you should do:

1. Lodge your BAS ASAP, even if you can’t pay the full amount right away.
2. Contact the ATO to explain your situation — you may be eligible for a payment plan.
3. Keep the lines of communication open. Ignoring ATO notices can result in escalated penalties or compliance action.
4. Seek help from your accountant or BAS agent. They can advise on your options and may be able to negotiate on your behalf.

Tips to Avoid BAS Penalties

To stay compliant and protect your business from financial stress:

• Use accounting software that sends reminders before BAS is due (e.g., Xero, MYOB).
• Mark BAS due dates in your calendar — generally the 28th day after the end of each quarter.
• Outsource to a BAS agent or bookkeeper if lodging yourself is too time-consuming.
• Keep cash flow reserves for upcoming tax obligations.
• Stay informed by subscribing to ATO small business newsletters or updates.

The ATO takes BAS lodgement and payment seriously — and late penalties or interest can impact your bottom line. But small businesses aren’t without options. If you fall behind:

• Lodge as soon as possible
• Contact the ATO for a payment arrangement
• Apply for penalty remissions if there are valid reasons

Staying on top of your BAS is not just about avoiding fines — it’s about maintaining control of your business finances and reducing stress.

Useful Resources:

• ATO – BAS Due Dates
• ATO – Payment Plans
• ATO – Remissions and Penalty Relief

Source: ATO

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

For small businesses in Australia that are registered for GST, lodging a Business Activity Statement (BAS) is a mandatory and recurring task. The ATO relies on BAS to collect crucial tax obligations—such as GST, PAYG withholding, PAYG instalments, FBT, LCT, WET, and fuel tax credits—from millions of businesses across the country.

Staying compliant means high-quality record-keeping, accurate reporting, on-time lodgement, and readiness for audit. This article distils guidance from the ATO and reputable business associations to help you master BAS while avoiding penalties and improving your cash flow.

The ATO is increasingly proactive—using data matching to detect misreporting, especially among cash-based businesses, ride-share operators, and those misstating GST or PAYG. Fraud—such as falsifying BAS information—can lead to severe consequences, including jail. A recent case saw three convicted for launching fake businesses and lodging false BAS.

Core Components Reported in Your BAS

Your BAS may require you to report and pay the following, depending on your business structure and operations:

• GST – Collected from customers and creditable on business purchases
• PAYG Withholding – Tax withheld from employee wages
• PAYG Instalments – Advance income tax payments
• Fringe Benefits Tax (FBT) Instalments
• Luxury Car Tax (LCT) and Wine Equalisation Tax (WET)
• Fuel Tax Credits

How Often Must You Lodge Your BAS?

• Quarterly BAS is standard for most businesses—due on the 28th of the month following the quarter’s end:
  • Q1 (Jul–Sep): Oct 28
  • Q2 (Oct–Dec): Feb 28
  • Q3 (Jan–Mar): Apr 28
  • Q4 (Apr–Jun): Jul 28
• Monthly BAS is required for businesses with turnover over $20 million—due on the 21st of the next month.
• A nil BAS must still be lodged by the due date even when no taxable activity occurred.

Practical Tips to Manage Your BAS Efficiently

1. Maintain Up-to-Date Records
   Accurate and current books—especially when using cloud-based tools—simplify BAS preparation. Include dates, GST amounts, and descriptions for all transactions.
2. Reconcile Accounts Consistently
   Aligning your BAS figures with bank statements and accounting records ensures accuracy and protects your cash flow.
3. Categorise Transactions Correctly
   Carefully label income and expenses—ensuring GST-free, zero-rated, and input-taxed items are grouped properly—to avoid misreporting.
4. Use Digital Lodgement Tools or a Registered Agent
   • ATO Business Portal and SBR-enabled software offer secure and sometimes faster lodgement (plus a 2-week deferral).
   • Registered BAS agents can provide extended deadlines, accuracy, and audit support.
5. Know Your Deadlines & Avoid Penalties
   Missing deadlines may result in penalties starting at $313 per statement and accrue general interest charges. In 2025, the ATO began shifting businesses with poor compliance into monthly reporting for better habits.
6. Self‑Amend Mistakes Promptly
   If you discover an error after lodging, the ATO encourages self-correction to avoid escalated penalties.

By combining the ATO’s guidance with disciplined record-keeping and leveraging modern tools or registered professionals, you can handle BAS obligations confidently. This ensures compliance, optimises cash flow, and lets you focus on growing your business—not just managing tax paperwork.

—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-

We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.

BOOK YOUR ZOOM APPOINTMENT HERE

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

---

General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.