• Keeping the ABR up-to-date

    The Registrar of the Australian Business Register reviews Australian business numbers (ABNs) where there is evidence an entity may no longer be entitled to an ABN or were never entitled to an ABN. Where it is found that the entity is not entitled to the ABN, the ABN will be cancelled.

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    Why was my ABN cancelled?

    The Registrar of the Australian Business Register reviews ABNs where there is evidence an entity may no longer be entitled to an ABN or were never entitled to an ABN. Where it is found that the entity is not entitled to the ABN, the ABN will be cancelled.

    We may determine you are not carrying on an enterprise if you:

    • haven't lodged business activity statements (BAS) when you are registered for GST
    • haven't declared income at the business labels on your income tax returns
    • cannot demonstrate that you have taken real steps to start a business (for example, purchased materials, equipment or stock; obtained a premises to operate from; obtained licenses and/or insurance; developed a business plan and/or financial projections)
    • do not carry on enterprise in the form of a business (for example, your activities are not regular and frequent; there is no intention to make a profit; the activity is not a significant commercial activity, involving commercial sales of products or services, and is of a reasonable size and scale; the activity is not systematic, organised and carried on in a business-like way and records are kept)
    • are engaged in a working arrangement with a payer that has the characteristics of an employee (for example, you have no control over when and where you perform your tasks; you don't have the authority to delegate tasks; you do not own any risk involved with your work; you don't ordinarily purchase materials or equipment to perform your tasks).

    If you receive a letter saying your ABN has been cancelled, it will include the reason.

    If your ABN has been cancelled and you did not receive a letter, it could mean your contact details were not up-to-date.

    If your circumstances have not changed since your ABN was cancelled, it is likely that you don’t need an ABN.

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    I wasn't told my ABN was cancelled

    If your ABN is cancelled or your ABN application is refused, you will receive written notification of the effective date and the reason for the decision.

    You can use this letter as a record of the Registrar’s decision. And you can object to this decision within 60 days.

    If your ABN has been cancelled and you did not receive a letter, it could mean your contact details were not up-to-date. You can phone the ATO to obtain a copy of your ABN cancellation letter.

    Can I apply again for an ABN?

    If your circumstances have not changed since your ABN was cancelled, it is likely that you are not entitled to an ABN and you do not need an ABN.

    Most ABN applications are processed in real time. However, if you apply soon after your ABN is cancelled, the Registrar may manually intervene to discuss how your circumstances have changed in order to determine your entitlement. You may need to provide documentary evidence to support your ABN application.

    If your ABN has been cancelled and you’re looking to return to business, ensure you’re not applying too early and that you can demonstrate you’ve taken real steps to start your business.

    Starting your business doesn’t not always mean you’ve had your grand opening. Commencement activities could include:

    • consulting with financial, business or tax advisors
    • applying for finance or opening a bank account for the business
    • leasing premises or equipment for the business
    • purchasing premises, equipment or stock for the business
    • buying a business
    • obtaining business licences or insurance to operate
    • registering a patent/copyright
    • obtaining a registered business name
    • completing a business plan, feasibility study or financial projections
    • registering with relevant professional or industry associations for the business
    • purchasing business cards or stationery for the business
    • recruiting staff for the business
    • While you don't need to have undertaken all of these start-up activities, you would be expected to have undertaken at least several of them.

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    Can I apply for an ABN under a different entity type?

    If your ABN was recently cancelled due to the fact that you are not carrying on a business and you decide to reapply for an ABN under a different business structure such as a company, trust or partnership, you need to ensure the arrangement is not one of sham contracting.

    Some employers require their workers to obtain ABNs to reduce their labour costs. In these circumstances the worker typically is underpaid and does not receive all their entitlements. Those employers engaging in sham contracting are exposing themselves to possible penalties from the ATO, State and Territory Revenue Offices and the Fair Work Ombudsman.

    Do I have to lodge outstanding income tax returns?

    If your ABN was cancelled and you have not met income tax lodgement obligations you are still required to lodge all outstanding returns.

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    Do I have to lodge outstanding business activity statements?

    If you were/are registered with other tax roles (for example, PAYG, GST, PAYG withholding) you may have a reporting obligation to lodge business activity statements (BAS). Remember, the cancelling of your ABN does not mean you avoid the requirement to lodge your BAS during the period your ABN was active.

    If your ABN is cancelled you are still required to lodge any outstanding BASs and remit any GST collected.

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    What happens if I work for cash?

    If your ABN is cancelled and you continue to perform your duties and receive cash from payers, your obligation to report income received in the relevant income tax return is the same as when your ABN was active.

    Receiving cash for work performed is sometimes a way employers avoid meeting their obligations to you as an employee; such as receiving superannuation benefits, leave entitlements and the withholding of income tax.

    If your ABN is cancelled and your employer offers a cash arrangement and you suspect the business is incorrectly treating an employee as a contractor it is important you let us know. You can report a business through the Tax Evasion Reporting CentreExternal Link.

    See also:

    What happens if I quote/use another entity’s ABN?

    It is an offence under the A New Tax System (Australian Business Number) Act 1999 (ABN Act) to quote an ABN that is not your own. The penalty for doing so can be two years imprisonment.

    What happens if I quote/use my ABN after it is cancelled?

    When an ABN is cancelled you cease to have an ABN and it cannot be used in quotes for work, or on invoices for the provision of services and/or making purchases, or receiving payment for work undertaken.

    Purporting to have an active ABN when you do not is an offence under section 23 of the A New Tax System (Australian Business Number) Act 1999 (ABN Act). The penalty for doing so can be two years imprisonment.

    You can check the status of your ABN or anyone else's ABN using ABN Lookup.

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    What do I tell my employer?

    Your employer cannot continue to pay you under a cancelled ABN.

    If you registered for an ABN because your employer told you to and the ABN was subsequently cancelled, you should consider the following:

    • Have a conversation with your employer to tell them that the Registrar has deemed the working arrangement not to be one appropriate for an ABN and negotiate a change to another arrangement such as employee. Your employer might not know that they risk penalties for incorrectly engaging workers under an ABN. If you've signed a contract, consider whether you need to re-negotiate the terms and conditions.
    • Refer to the information provided by the Fairwork Ombudsman to help you understand more about working arrangements and how they affect you, your entitlements and responsibilities.
    • You should contact the ATO as you may be entitled to superannuation payments from your employer.
    • If you've signed a contract, consider whether you need to re-negotiate the terms and conditions. Getting legal advice can help you to understand what you are agreeing to and what you can or cannot change.
    • If you think you are being incorrectly engaged by your employer you can report this to the ATO anonymously. You can report a business that is incorrectly treating an employee as a contractor through the Tax Evasion Reporting CentreExternal Link.

    There are many misconceptions about employee and contractor working arrangements.

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    Why do job advertisements require an ABN?

    Many job advertisements include the requirement of an ABN as a condition of employment. Just because the employer requires an ABN does not mean you are entitled to an ABN for the work you may do for that employer.

    The details of a working arrangement are often not disclosed in the advertisement or job description so you should not apply for an ABN until you understand the relationship you may have with the employer.

    But everyone else is paid under an ABN?

    Any ABN entitlement decision the Registrar makes applies to the individual circumstances of the ABN holder only. If you perform similar, or the same duties as a work colleague and your ABN is cancelled, it likely that your colleague is also not entitled to an ABN. You are encouraged to discuss entitlement to an ABN in your workplace so that all workers are correctly engaged.

    You can report a business that is incorrectly treating an employee as a contractor through the Tax Evasion Reporting CentreExternal Link.

    Can I apply for an ABN before I need it?

    If your ABN is cancelled and you intend to start your business sometime in the future you are welcome to apply again when your circumstances change. You will receive the same ABN back and the application process only takes 5-10 minutes.

    An ABN is only required where an enterprise exists or you are taking real steps to start your business.

    Taking steps to start your business requires more than an intention to carry on a business. Activities that evidence you are taking steps to start your business include:

    • consulting with financial, business or tax advisors
    • applying for finance or opening a bank account for the business
    • leasing premises or equipment for the business
    • purchasing premises, equipment or stock for the business
    • buying a business
    • obtaining business licences or insurance to operate
    • registering a patent/copyright
    • obtaining a registered business name
    • completing a business plan, feasibility study or financial projections
    • registering with relevant professional or industry associations for the business
    • purchasing business cards or stationery for the business
    • recruiting staff for the business.

    You do not need to have undertaken all of these commencement activities. It would be expected, however, that you would have undertaken several of them in order to demonstrate your commitment to starting a business.

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    Do I need to adjust my previous tax return?

    When your ABN is cancelled, the Registrar has made a decision that you were not carrying on a business and this may have impacts on how you previously reported income in income tax returns during the period your ABN was active.

    For example, if you reported business income, and claimed income tax expenses as deductions for a period when you were in fact an employee, you may be required to report your income as salary and wages and reconsider your entitlement to claim those deductions. This may mean an amendment is required to a lodged return.

    You are encouraged to seek income tax advice from a tax professional.

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    Can I use a Statement by a supplier form instead of an ABN?

    Certain suppliers are not required to quote an ABN to a payer. In these cases, the suppliers can use the form Statement by a supplierExternal Link to justify the payer not withholding from the payment to the supplier.

    The reason your ABN was cancelled may determine whether the Statement by a supplier form is right for you. For example, if your ABN was cancelled because you are being engaged as an employee, then you cannot use a Statement by a supplier form with respect to the supplies you make as an employee in place of an ABN to receive payment.

    There are specific circumstances that constitute who can and can’t complete a Statement by a supplier form.

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    • Last modified: 26 Jun 2017QC 487