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ATO reminder regarding inactive ABNs

The ATO has advised that inactive Australian Business Number’s may soon be automatically cancelled in a current review. Those who are unsure if their ABN is still active or not should get in touch with their accountant or bookkeeper.

The Australian Business Register (ABR) frequently checks ABN records and automatically cancels them if they are deemed to be inactive. A representative from the ATO advised that ABN’s may be selected for cancellation if they have not reported business activity in their tax return, or if there are no signs of business activity in other lodgements or third-party information.  If an ABN is identified for cancellation, the business owner may be contacted and advised what steps they need to take to prevent their ABN from being cancelled.

To avoid cancellation, ABN holders need to ensure their lodgements are up to date.  Regardless of income, the following still needs to be lodged.

  • Individual tax return including the supplementary section
  • Business and professional items schedule for individuals

If circumstances have changed for the ABN holder, then they should consider if their ABN needs to be cancelled. If an ABN is cancelled, the holder is still required to lodge any outstanding tax returns and activity statements as soon as possible.

Business owners are reminded that any income earned under their ABN needs to be reported in their tax return, regardless of the amount. By keeping up to date with their tax obligations, then the ATO can see they are actively undertaking a business, therefore their ABN should not be cancelled.

If the business is no longer trading, no action is required to be taken. If the ABN has been cancelled and a business owner is still entitled to one, they will need to reapply to reactivate it.

In some instances, ABN holders sometimes simply forget to update their ABN details in the Australian Business Register (ABR) when their circumstances or details change. By keeping ABN details up to date, they can reduce unnecessary contact from the ATO.

If you need to reapply for an ABN, you can go to the ABR Website or contact the team at Cotchy to assist.

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