The reason why you decide to cancel your ABN may vary depending on your circumstances. Maybe you are no longer operating your business in Australia, you are changing your business, or you are closing your shop.
Irrespective of the reason, there’s one question that remains: How can you cancel your ABN?
Thus, in the following guide, we have collected all the information when it comes to cancelling your ABN and the steps you might need to take after cancelling it. But first, let’s have a quick overview of what an ABN is.
What is an ABN?
An ABN or Australian Business Number is a unique 11-digit number that is used to represent your business to the government and the community. It is used to:
- Purchase an Australian domain name;
- Identify your business to other businesses when invoicing and ordering;
- Claim GST (goods and services tax) credits;
- Avoid pay-as-you-go (PAYG) tax on payments you receive;
- Claim energy grant credits.
If you want to look for an ABN of a business, you can do it via the ABN lookup website.
Cancel your ABN: a step-by-step process.
Cancelling an ABN is not too difficult. You can easily do it by following the step-by-step process given here:
Step 1: Check if you need to cancel your ABN
When a business is permanently closed in Australia, it is no longer entitled to an ABN. In this case, you need to cancel your ABN. Along with this, in the following cases, the ABN must be cancelled:
- You have sold your business
- You are no longer operating within Australia or making supplies connected with Australia
- the business structure has been changed
When a business structure is changed, the legal and tax obligations, along with personal liability, also change. Thus, it becomes necessary to cancel the old ABN and then reapply to get a new one.
However, if the ownership changes, you will not have to cancel your ABN. Keep in mind that it is a legal entity and not an enterprise that is registered for an ABN. If a new partner is added or the previous one is leaving, you may be able to keep the same Australian Business Number (ABN) and simply update it.
Since an ABN cannot be transferred, you will have to cancel your ABN when you sell your business or transfer it to a family business.
We understand that deciding whether to cancel your ABN or not can be difficult, which is why we are here to help. Reach out to Clear Tax Accountants to seek professional advice regarding your ABN and its cancellation.
Step 2: Make sure that there are no outstanding obligations
Now that you know if you need to cancel your ABN or not, it is time to ensure that there aren’t any outstanding obligations.
If you think that ABN is just a business registration number, then you would be mistaken. Your ABN is not just a number for your business; it’s a way for your company to share information with the Australian Taxation Office (ATO) and other government agencies.
So, before you decide to close this communication channel, make sure you’ve taken care of any unresolved issues you may have with these government agencies. It’s important to tie up loose ends before closing your ABN.
This would include:
- Submitting your activity statements.
- Completing your income tax returns.
- Settling any tax payments.
- Taking care of your GST payments.
- Closing your PAYG account.
If you don’t settle these obligations before cancelling your ABN, it can lead to problems. For instance, not closing your PAYG withholding before cancelling your ABN might result in questions from the Australian Business Register (ABR) about unpaid employee income tax withholdings.
It’s crucial to wait until all these processes are completed and loose ends are tied up before cancelling your ABN. Remember that cancelling your ABN doesn’t just end your relationship with the ATO; it also affects other registrations:
- Taxation registrations like GST, luxury car tax, wine equalization tax, and fuel tax credits will be removed.
- Any authorized relationships between myGovID and your ABN will be terminated. This means representatives with login credentials for your business won’t be able to use them, possibly limiting your access to certain government online services.
Make sure to consider these factors before cancelling your ABN to avoid any issues down the line.
Step 3: Choose the method to cancel your ABN
To cancel your ABN, you must notify the Australian Business Register (ABR) within 28 days of stopping your business activities. If there are other changes in your business, like a new structure or name, make sure to update these details on the ABR within the same 28-day period.
As there are different ways to cancel your ABN, you can choose the method that will suit the current situation best.
Online Cancellation: The quickest way is to cancel your ABN online using myGovID, provided it is linked to your ABN. Alternatively, you can visit the ATO’s website to cancel online if your entity is registered with the Tax Office’s online services.
Phone Cancellation: If you have questions or need assistance, call ABR at 13 92 26 between 8 am and 6 pm, Monday to Friday. Ensure you are authorized to update ABN details and have your tax file number (TFN) ready for identity verification.
Tax Agent Assistance: If you prefer guidance, consider asking a registered tax agent, such as Clear Tax Accountants, to handle the ABN cancellation. This ensures a smooth process and takes care of any lodgement or payment obligations.
Remember to submit the necessary forms, including the “Application to Cancel Registration,” which can be ordered online with NAT number 2955, regardless of the chosen cancellation method. Cancelling your ABN correctly is crucial for wrapping up your business affairs efficiently.
Step 4: Update your information post-cancellation
After cancellation, you have to make sure that this is reflected in the government records. You will have to update your business records and await ATO’s confirmation.
In conclusion, cancelling your ABN is more than a mere formality; it involves careful consideration to avoid potential pitfalls. Failing to fulfil lodgements and reporting obligations with government agencies can lead to the cancellation of your ABN, risking your business’s legitimacy.
This guide aims to help you confidently navigate this process, ensuring a swift cancellation and safeguarding your business’s reputation in the face of regulatory changes.
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