Your ABN Is Your Business’s Identifier – What Happens If It Gets Cancelled?

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You may not have thought about it recently, but is it possible that your ABN is at risk of cancellation? Unfortunately for some, this is a distinct possibility for businesses after dealing with several years of business fluctuation.

As a resident of Australia, you are entitled to an ABN if you’re:

  • carrying on or starting an enterprise in Australia
  • making supplies connected with Australia’s indirect tax zone
  • a Corporations Act company

You may also be entitled to an Australian Business number if you are a non-resident who is:

  • Carrying on or starting an enterprise in Australia
  • Making supplies connected with Australia’s direct tax zone.

If your business has been in reduced operation recently, this should be of concern to you.

If you have not reported business activity in your tax return or there are no other signs of business activity in other lodgments or third-party information, your Australian Business Number may be flagged for inactivity.

If an ABN is identified as being inactive, the Australian Taxation Office (ATO) may select it as a candidate for cancellation. In the event that your ABN is cancelled, you will not have a legal business in operation.

Would your customers be likely to deal with an illegal business? It is most likely that no, they would not. As such, losing customers to something like this means a loss of revenue – something that no business ever wants to see happen.

It is your responsibility to maintain your ABN details. If you lapse, the ATO will notify you of the pending cancellation.

The ATO periodically checks ABNs for inactivity to make sure that the information available on the Australian Business Register is correct. The ABR’s information is also used in the event of natural disasters by emergency services and government agencies to identify where financial disaster relief is needed to help businesses.

In the event that there are defunct or inactive ABNs in the ABR, they may incorrectly receive funds that they are not actually eligible to receive.

If your ABN is cancelled and you need it later:

  • you can reapply for the same ABN if your business structure is the same
  • you’ll get a different ABN if your business structure is different (e.g. you were a sole trader but are now a company)

If the ATO cancels your ABN and you disagree with the decision, you can contact them directly to try to resolve the issue directly.

One of the main causes for ABN cancellation is a failure to lodge business activity in your tax returns. Remember that registered tax agents like us can assist you during that process, and help you avoid losing your ABN.

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