Lodge the BAS: Why Not Lodging Can Create Personal Risk
One of the biggest mistakes directors make when cash flow gets tight is deciding not to lodge BAS, IAS and superannuation because they cannot afford to pay them.
The thinking is usually that if the company does not lodge, it might stay off the ATO’s radar for longer. That approach rarely ends well.
Not lodging might buy some time, but it often turns a company problem into a personal one.
If BAS and IAS are not lodged within the required timeframe, and superannuation is not reported within the required timeframe, the ATO can issue a lockdown DPN.
A lockdown DPN can make a director personally liable for company debt regardless of whether the company later enters small business restructuring, liquidation or voluntary administration.
Lodging on time, even if you cannot pay the debt, can help avoid personal liability and preserve options. If the debt is not manageable long-term, it is time to discuss other options.
