The Australian taxation office has decided to continue canceling Australian Business Numbers of enterprises that are reviewed as inactive. This includes operating a genuine business but failing to file tax returns and activity statements. If a company reported any business activity like a tax return, income lodgement, other lodgements, or third party information then the ABN of the business can get selected for cancellation. In case of ABN cancellation, a business will no longer be legal, and continuing to do business will be considered unlawful.
Now the question is, why ABNs are getting canceled? This is happening so that the Australian Business Register has correct and up-to-date information about all the ongoing businesses in Australia. It will also help ABR to determine where financial disaster support is needed to assist businesses at the time of any natural calamities. Along with that customers and suppliers can use the ABR to ensure that they are dealing with a legitimate company. If there is no ABN on the register, then clients or suppliers will withhold 45 percent of any payments owed to a company and may eventually stop doing business with the same. Other companies require an appropriate ABN from a business on tax invoices supplied, to collect GST credits on purchases.
What happens when your ABN is taken up on the list for cancellation?
For starters, the ATO may contact you and advise you on what steps you must take to keep it from being canceled. This may involve submitting unfilled activity statements demonstrating business income. You are not supposed to do anything about it if you are no longer in business. But if you plan to continue your enterprise, you must reapply to reactivate it at www.abr.gov.au. One can mention the former ABN on the application for a new ABN when reactivating a canceled ABN. Although reactivating a canceled ABN is free but in case a business name needs to be re-registered, then it may be charged some amount.
When a canceled ABN is reinstated, the ATO may conduct a manual review. In this business eligibility and entitlement to an ABN will be determined. The eligibility is determined by whether an individual can run a business. If the business structure remains the same, then one can reapply for the same ABN, if not then one needs to register for a new ABN. So, don’t wait to get your ABN pop up in the list of cancellations. Keep your records well updated. Timely report your tax return, income, and other lodgements. As it is said “precautions are always better than cure,” keep your business active in the reports of ABR and enjoy all the benefits fermented upon you. In case of any confusion or queries, you can consult your accountant or financial expert. It is wiser to talk to an expert. Don’t let that wave of laziness ruin your business in just a blink, work hard and achieve the heights of success. Be super productive in your work and active in the books of ABR. Hoping a prosperous business to all!