Inactive ABNs to be cancelled, warns ATO

Tax agents are urged to encourage their clients to confirm their ABN is still active via a new secure voice response system. The ATO also warns tax agents, clients may be selected if they have not reported business activity in their tax returns or there are no signs of business activity in other lodgements or third-party information.

The ATO has encouraged tax professions to remind clients that any income earned under their ABN needs to be reported in their tax return, regardless of the amount. By keeping their tax obligations up to date, the ATO said, it can see they are actively undertaking a business, therefore their ABN should not be cancelled.

Further, the ATO said if a client’s ABN is identified for cancellation they may be contacted and advised what actions needed to be taken to prevent their ABN from being cancelled. If clients are no longer in business, no action is required to be taken.

If an ABN has been cancelled and the client is still entitled to one, they will need to reapply to reactivate it.

“Updating your Australian business number (ABN) details might be the last thing on your mind but it is important to keep your organisation’s contact details up to date, especially as the risk of natural disasters like bushfire and storms increases at this time of year,” the ATO said in a statement. 

“During times of emergency or natural disaster, your ABN details are used by emergency services and government agencies to help identify businesses in affected areas that might need help or support. If your ABN details are out-of-date you risk missing out on important assistance, updates or opportunities such as grants.”

All ABN details must contain up-to-date information on authorised contacts; the organisation’s physical location (not the tax agent’s address); postal address; email address and phone number. 

Updated details must be lodged within 28 days of becoming aware of changes. The registrar is undertaking regular activities to remove ceased businesses from the register.

If an organisation is no longer operating, the ABN should be cancelled online by using a myGovID linked to the ABN using Relationship Authorisation Manager (RAM).