An ABN is a unique number provided by the Australian Business Register (ABR) as an identity for businesses in Australia. The ABR is charged with maintaining a comprehensive database of registered business information. Customers, other businesses and government bodies can use the database to identify you and your business.
You can apply for an ABN online through the ABR website. If you want to register for an ABN, you must be entitled to one.
Possible Reasons Your ABN Can Get Cancelled
The ATO has a right to cancel your ABN. This can mean serious trouble if you run a commercially viable business. The Registrar can cancel an entity’s registration if satisfied that the entity is not entitled to have an Australian Business Number (ABN).
Have it in mind that an entity is not entitled to an ABN where it is not carrying on an enterprise in Australia or in the course of carrying on an enterprise it is not making supplies connected with the indirect tax zone. Note that carrying on an enterprise includes activities done in the course of terminating the enterprise.
Whether those activities have a connection with the termination is a question of fact and degree and will depend on the circumstances of each particular case. Also have it in mind that the Registrar can also cancel an entity’s registration where the identity that the entity or its associate is registered under is not their true identity.
It is also crucial to know that people cancel their Australian Business Numbers (ABN) for a number of reasons. Perhaps you have decided to stop trading, you have sold your business, or you have decided to change your business’s structure. Sometimes business owners may wish to resume trading but you should always reactivate your ABN first.
Every business owner in Australia needs to be aware of the rules and how to avoid ABN cancellation. Australian Business Register (ABR) periodically checks its records for Australian business numbers (ABNs) and automatically cancels those that appear inactive.
What Happens When your ABN is Cancelled?
If your ABN is cancelled, you have no legal business, which means you are operating illegally. Would you do business with an illegal business and not be able to claim it as a legitimate tax deduction? You would not, so your customers would not either.
Business owners that have cancelled their ABN may think that they can just get back up and trade. But without an ABN, your business has no identification and you will be breaking the law.
Once your ABN has been cancelled, you should use the ABN lookup tool on the ABR website to check if the status has changed from active to cancelled. You will also need to ensure that you have complied with any outstanding obligations.
Also, you will need to cancel any Goods and Services Tax (GST) and Pay as you Go Withholding (PAYG) registrations linked to the cancelled ABN, as these do not cancel automatically. You should also lodge any outstanding income tax reports or business activity statements.
How to Reactivate Your ABN in 4 Steps
Re-applying for an ABN is only allowed if your ABN has been cancelled. You will be able to see which one applies on the ABN lookup tool. If your ABN is still active then you’re required to update the details of your new venture within 28 days.
Note that the best way of processing this is via your AUSkey; however this can also be updated online or by contacting the ABR. If your ABN has been cancelled then it is imperative you follow the process of getting this reactivated. This is because it is an offence to quote an inactive ABN in a transaction.
In addition, if your business is making $75,000 per year or more, you cannot trade without having an active ABN. Immediately you have confirmed your ABN is cancelled, you simply need to re-apply for it. Here are the steps you can take to reactivate a cancelled ABN.
Fill out your Entity’s Information
Whether you are a sole trader, a partnership or a company, have it in mind that you will need to provide all needed entity information. This information may include your entity’s name, TFN, etc. Follow the prompts and make sure you have all your business’s important details available and accessible.
Provide your Contact Details
Irrespective of your business structure you will be expected to provide your main business address. This can be an office or store you rent, or your residence.
Note that to Reactivate Your ABN, you are expected to provide the reason for your application. As your ABN has been cancelled, you will need to select ‘recommenced business’ and complete the remaining information.
Confirmation and Completion
Once you must have completed all the fields, double check that you have provided the correct information. Within 24 hours your ABN will be reactivated. Alternatively, you can re-apply through the ABR website. Their system will then search for your previous ABN. Once authorised, your ABN status should update to ‘Active’.
An Australian Business Number (ABN) may be cancelled for a number of reasons. As a business owner, you may decide to run your business again after your ABN has been cancelled. Howbeit, you need to know if you can reactivate the cancelled ABN or if you need to request a new ABN.
Note that you can reactivate your cancelled ABN so long as you are entitled to have one. As for a new application, you are expected to show that you are carrying on a business in Australia or you have a foreign business conducting business in Australia.
Additionally, when reactivating a cancelled ABN, you are expected to reapply for the ABN through the ABR. You can list your previous ABN during the application for a new ABN. Reactivating a cancelled ABN requires no fee. However, you may incur a fee if you need to re-register your business name.
Sometimes the ATO will conduct a manual review when you reactivate a cancelled ABN. This manual review can determine your eligibility and entitlement for an ABN. You can reapply for the same ABN if your business structure remains the same. If your business structure has changed, you will need to apply for a new ABN.