• Integrity focus areas

    The ABR undertakes a comprehensive integrity program to keep the register up-to-date and to identify and cancel ABNs that are issued where there is no entitlement or the business is no longer in operation. These activities include:

    • targeting certain high-risk industries and taking a whole of industry approach to change behaviour to ensure all businesses within the industry are not incorrectly using ABNs to engage workers and thereby operating on an equal footing
    • reviewing employers who are suspected of incorrectly advising their workers to obtain an ABN
    • reviewing ABNs identified as not being used for business
    • targeting specific visa holders where there is a high risk of no ABN entitlement
    • removing ABNs that have shown no signs of business activity in the last two years
    • identifying ABN holders with incomplete or invalid business information and asking them to update their information.
    • We are increasing our focus on employers and industries that incorrectly require their workers to obtain an ABN. If your employer is asking you to get an ABN it is highly likely you are not entitled to an ABN.

    Industries

    We will be targeting certain high-risk industries where there are wide spread practices of engaging workers incorrectly under an ABN.

    For these industries we will work with the peak industry bodies to effect an enduring change in the industry in their worker engagement strategies helping to create a level playing field for businesses operating in that industry.

    In undertaking industry reviews we will review the ABNs engaged by a number of businesses in that industry and advise which arrangements are suitable for engaging workers under ABNs and which are not. We will then ask other businesses in these industries to confirm that they are not using any of the inappropriate ABN engagement arrangements.

    Employers

    Some employers require their workers to obtain ABNs when they are not entitled to an ABN. The main reason for employers requiring their workers to be engaged under an ABN is to reduce their labour costs (avoiding PAYG Withholding, worker’s compensation, payroll tax, and Super Guarantee payments); with the worker missing out on leave entitlements, super contributions, and without the protection of unfair dismissal laws; and government with shortfalls in revenue.

    We will be contacting employers who are suspected of incorrectly engaging their workers under an ABN contrary to proper employment practices.

    We will be asking these employers to verify their sub-contractor’s status.

    We will talk to ABN holders suspected to be employees who are paid by their employer via an ABN and cancel ABNs where a business is not being conducted by the worker.

    Where we find an employer has been incorrectly paying their workers as a contractor, we will work with the employer to transition the workers to more appropriate arrangements and we may also refer these cases to relevant commonwealth and state/territory regulatory agencies for their consideration. There may be some retrospective liabilities/penalties imposed by these agencies on the employer.

    We will act on referrals from the communityExternal Link and other government agencies about employers who may be incorrectly requiring their workers to have an ABN.

    ABNs not being used for business

    If you are a newly registered ABN holder or an existing ABN holder in a high-risk group, we may review your circumstances to determine whether you are running a business.

    Some key indicators that you are running a business include – you:

    • source your own clients, eg advertise your business
    • can delegate work to others if you choose
    • quote for the work you do, including setting and negotiating your price
    • invoice for your work
    • have a bank account for the business separate from your own bank account
    • are responsible for your own public liability, professional indemnity and/or workers compensation/income protection insurance
    • have taken real steps to start your business, eg sought financial or legal advice, obtained licences, professional memberships, application for finance, partnership agreement etc.

    If an employer has asked you to get an ABN in order to work, it is highly likely you are not entitled to an ABN.

    We identify high-risk ABNs using information from the ABR and other government agencies, referrals from the community and risks identified through environmental scans.

    We will cancel ABNs where there is no evidence they are being used for business and there is no entitlement to an ABN.

    Visa holders

    We find that over 90% of the following visa holders with an ABN are not entitled to an ABN:

    • student visas
    • working holiday visas.

    We will contact and review ABNs held by visa holders identified as high risk of not being entitled to an ABN.

    We will also work with other government agencies such as the Department of Immigration and Border Protection to use and share information about ABN holders on visas.

    Removing redundant ABNs

    We automatically cancel ABNs for sole traders, partnerships and trusts that have not shown any signs of business activity for more than two years, for example, non-lodgment of income tax returns and or Business Activity Statements where there is a requirement to lodge.

    We will cancel the ABNs of companies that ASIC advises us have been de-registered.

    We will cancel your ABN if you have advised in your latest income tax return that you ceased your business or you advise that you no longer need to lodge an income tax return.

    In the last 3 years we have cancelled over 2 million ABNs where there are no signs of business activity.

    • Last modified: 19 Jul 2017QC 1156