When to Cancel Your Australian Business Number

man holding tablet displaying an invoice

There's no shame in not knowing what an Australian business number or ABN does for your business. However, not cancelling an ABN can cause embarrassment and accounting issues to consider.

What's an ABN got to do with your business?

Our businesses are more than the sum of the 11 digit ABN. However, with hundreds of thousands of new business registrations every year, a number is a simpler way to identify unique ventures like yours from another similarly named going concern.

The Australian Government says new businesses will use an ABN to accomplish:

  • Ordering and invoicing accurately.
  • Avoiding pay as you go (PAYG) tax on payments received.
  • Claiming goods and services tax (GST) credits.
  • Claiming energy grants credits.
  • Obtaining an Australian domain name.

ABN Use Cases

The ATO requires you to have all the necessary information on invoices – including an ABN – if you wish to claim tax credits. Once you have an ABN, you can register for another number – the Goods and Services Tax (GST) tax number.

In the case of the PAYG, should vendors not supply you with an ABN number (most quote an ABN on an invoice) the Australian Taxation Office (ATO) will require you withhold the top tax rate from their payment.

You can register for a domain name without an ABN but you're limited to non-commercial domain and specific domain extensions like .net or .com. To obtain a .com.au domain name, you have to register with the Australian Domain Name Authority (auDA) which requires an ABN or Australian Country Number.

Hopefully, you can see that an ABN is an integral part of operating a going concern. However, when you sell or no longer operate a business in Australia cancelling an ABN may seem like the least of your concerns. The ATO would disagree.

How do you cancel your ABN?

During the past few years, commercial activity has changed dramatically for some small business owners. Did you know that if you've not lodged any business activity, the ATO will flag your ABN inactive?

The ATO reviews which ABNs are not active to keep the Australian Business Registry current and cut down on unnecessary administrative mistakes. For example, disaster relief payments paid to inactive or forgotten ABNs.

The steps for cancellation are as follows:

  • Make sure all lodgement, reporting and payments to any government agencies are paid up.
  • Close your PAYG withholding before cancelling the ABN.

You can cancel an ABN online, by mail or over the phone with the Australian Business Registry.

Contact WMC Accounting if you need assistance with winding up your business in order to close your ABN.

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