As part of the ATO’s work to ensure the integrity of the Australian Business Register, it investigates the business activities of Australian Business Number (ABN) holders when it seems their ABN is no longer being used – for example, if business income isn’t being reported, or where the Australian Securities and Investments Commission (ASIC) deregisters a company. The ATO may then cancel the ABN where there’s sufficient evidence the business is inactive. An ABN will also be cancelled when the taxpayer themselves advises they’ve stopped their business activities, or when they lodge their final tax return.
The ATO is ramping up its focus on cancelling inactive ABNs over the coming months, saying it’s refined its models to help identify businesses that are no longer active or whose owners have forgotten to cancel their ABN when they ceased business.
If an ABN is cancelled and the holder is still running a business, or an ABN application is refused, the taxpayer can object to the decision within 60 days.
TIP: If your ABN seems to be inactive, the ATO may ask you for evidence that you’re setting up or still running a business. We can help you with putting together this information, or with applying to have your ABN reinstated if it’s incorrectly cancelled.