Quick answer
If a business tax bill is bigger than your cash, your main options are paying from cash flow, asking the ATO for a payment plan, or using a business loan to pay it in full. A loan can suit when the ATO's terms don't fit your cash flow or you want to avoid a growing debt. Lodge on time regardless — and set tax aside every week so it never surprises you again.
Key points
- Lodge on time even if you can't pay in full.
- Options: cash flow, an ATO payment plan or a business loan.
- Quarterly BAS is generally due 28 October, 28 February, 28 April and 28 July.
- A separate tax account is the best long-term fix.
A big tax bill is often a sign of a good year — which makes it extra annoying when it arrives just after you’ve spent the profits on growing. Whether it’s a quarterly BAS, an income tax assessment or a jump in PAYG instalments, the key is to deal with it early and choose the option that fits your cash flow, before it becomes an overdue debt.
When do business tax bills fall due?
The ATO lists these BAS due dates:
| Reporting period | Due date |
|---|---|
| Quarter 1 (July–September) | 28 October |
| Quarter 2 (October–December) | 28 February |
| Quarter 3 (January–March) | 28 April |
| Quarter 4 (April–June) | 28 July |
| Monthly BAS | 21st of the following month |
Income tax for companies and trusts follows its own timetable, which your tax agent will know. Put every date in your calendar along with an estimate of the amount — the cash-flow gap estimator lets you add a one-off bill to see its effect.
What are your options if the bill is bigger than your cash?
| Option | How it works | Watch out for |
|---|---|---|
| Pay from cash flow | Stretch the bank balance and delay other spending | Leaves no buffer for surprises |
| ATO payment plan | Pay the ATO in instalments | The ATO considers many factors and may not accept your terms; general interest charge continues |
| Short-term business loan | Borrow the amount and repay over months | Loan costs; needs a clear repayment plan |
| ATO debt funding | A loan, often property-secured, to clear a larger debt | Larger debts usually need property |
| Line of credit | Draw for the bill, repay from upcoming income | Easy to let it linger |
Whatever you choose, lodge on time. Lodging keeps the debt visible and avoids additional penalties for failing to lodge.
When does a loan make more sense than a payment plan?
- The ATO’s terms don’t fit. If the ATO wants larger instalments than your cash flow can carry, a loan structured around your trading may be easier to live with.
- The debt is large and overdue. The ATO says it may report business tax debts to credit reporting bureaus where at least $100,000 is overdue by more than 90 days and the business isn’t effectively engaging with it, among other conditions. Clearing the debt removes that risk.
- You want one clean repayment rather than a payment plan stacked on top of other commitments.
When a payment plan suits better: smaller amounts, a short timeframe and terms the ATO is happy to accept. If you’d like help comparing the two in dollars, send us the details.
What does it look like in practice? (illustrative)
A Darwin building services company had a record year and reinvested profits in two new vans and an extra team. Its income tax bill and a large quarterly BAS arrived together in the wet season, when work slows. Rather than drain its buffer or fall behind with the ATO, the company used a short-term loan to pay both on time, repaying it over the following months as dry-season work picked up. It now transfers a set share of every payment into a separate tax account. Illustrative only.
How do you make next year’s tax bill painless?
- Open a separate tax account and move GST and PAYG withholding into it as soon as customers pay you.
- Set aside for income tax — your accountant can suggest a percentage based on projected profit.
- Review mid-year. If profit is running ahead, adjust PAYG instalments or your set-aside.
- Watch the payday super change. From 1 July 2026, super goes out with every pay run under Payday Super, so budget for it weekly or fortnightly.
- Don’t spend the GST. It was never your money — it’s collected on the ATO’s behalf.
What if you’ve already fallen behind?
Act now. Lodge any outstanding statements, check your ATO account balance, and decide on a plan within days, not months. If the debt is significant, ATO debt funding or business debt consolidation may be options. The worst approach is silence — the ATO is more flexible with businesses that engage.
Why do profitable businesses get caught by tax?
It usually comes down to timing. GST is collected all quarter but paid weeks after the quarter ends, so the money sits in the business account looking like it’s yours. Income tax is calculated on profit, not cash — so if profit went into stock, equipment or debt repayments, the cash isn’t there when the assessment arrives. And after a strong year, PAYG instalments rise too, so the following year carries both the catch-up and higher ongoing instalments. None of this means the business is doing badly; it means cash and tax are out of sync. A separate tax account fixes most of it.
What documents will you need for a tax loan?
- Your ATO statement of account or the BAS or assessment showing the amount
- Evidence lodgements are up to date (or a plan to bring them up to date)
- Recent business bank statements
- Financial statements for larger amounts
- Property details if offering security
- Photo ID and ABN or ACN
Ready to deal with that tax bill?
A tax bill handled early is just another bill. Left to grow, it becomes a problem. We’ll help you choose the option that fits your cash flow and get it sorted.
There’s no credit check when you enquire, your details stay with our team rather than being circulated to a crowd of lenders, and a real person calls you. Please be precise about the amount, the due date and your lodgement status so we can match the right option first time. See if you qualify.
Frequently asked questions
What should I do if I can't pay my BAS on time?
Lodge on time anyway, then contact the ATO about payment options or arrange finance. Lodging keeps the debt visible and avoids failure-to-lodge penalties, and engaging early keeps more options open.
Is it better to use a loan or an ATO payment plan?
It depends on the size of the debt, the ATO's terms and your cash flow. A payment plan avoids a new lender, but the ATO may not accept the terms you propose and general interest charges continue. A loan clears the debt at once and can be structured around your trading.
When are quarterly BAS payments due?
The ATO lists quarterly BAS due dates of 28 October, 28 February, 28 April and 28 July. Monthly BAS is due on the 21st of the following month.
How do I stop tax bills catching me out?
Move GST, PAYG withholding and a share for income tax into a separate account every time you're paid, and review projected income tax with your accountant before year end.