Calculation of GIC and penalty
Enquiry:
My business's quarterly BAS is lodged late with $15 000 owing. It was due to be lodged on 28 February 2019 (the day that tax is due). It is not lodged, and the tax is not paid until 17 March 2019. General Interest Charge (GIC) is due for 17 days (28 February to 17 March 2019) at the daily GIC compounding rate of 0.02454794 per cent.
Added to the GIC is a penalty for failing to lodge on time, which is imposed for each 28-day period (or part thereof) that a statement is overdue.
My business is a small business entity. Would you be able to advise me on how much the penalty is as well as the GIC charge?
Explanation:
For a small business entity, the penalty for late submission of documents (in this case the October–December BAS) is one penalty unit ($210) for every 28 days or part thereof. Your business is 17 days late (28 February–17 March 2019), which is less than 28 days and consequently, it would only be one penalty unit.
The GIC is due for 17 days at the daily GIC compounding rate of 0.02454794 per cent levied on the overdue tax amount of $15,000. The amount of your business's total debt is made up of the outstanding tax and the GIC:
$15 000 × (1.0002454794) ^17 = $15,062.72
The GIC is $62.72.