If you are changing your business structure (eg from sole trader to a company), you will need to apply for a new ABN.
Examples of when you need to cancel your ABN and apply for a new ABN under the new structure include moving from either:
- Individual/sole trader to partnership or trust
- Individual/sole trader to company or trust
- Partnership to company or trust
You must ensure that your ABN details are updated on your tax invoices. This is essential as your ABN is used to:
- Identify your business identity to others when ordering and invoicing
- Claim GST credits
Other businesses and entities must withhold payment at the top tax rate if the ABN quoted on the invoice is incorrect or the details do not match up.
Did you know that you can lose your ABN?
The ATO will cancel your ABN if your business is no longer operating. Not keeping lodgements up to date is a key indication of this. So that they get it right, the ATO uses information from:
- Your tax return
- Other lodgements
- Third party information
What happens if the ATO cancels your ABN?
If the ATO cancels your ABN and you want to start your business again, or the ATO gets it wrong, you can reapply and get the same ABN back (as long as your business structure remains the same).
If the business structure is different – for example, you were a sole trader but your new business is a company – you will get a different ABN.
All businesses, including not for profits, are now required to meet their PAYG withholding obligations …