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Tax agents have been given a heads up that the ATO will “focus more” on its bulk Australian business number (ABN) cancellation program from this month on.
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Tax Office to focus on ABN cancellation program
22 October 2019
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In an online update, the ATO has announced that it will increase its focus on cancelling ABNs, using a model to identify businesses that are no longer active or have forgotten to cancel their ABN when they ceased business.
Some information that the ATO will use as indicators that a business is no longer operating will include information in the ABN holder’s tax return and other lodgements, if the ABN holder’s lodgements are outstanding, and other third-party information.
Tax agents have been advised that if the ATO mistakenly cancels a client’s ABN, the client can reapply for the same ABN if their business structure remains the same or be issued with a new ABN if their business structure has changed.
With the ABN system celebrating its 20th anniversary this year, the government is set to implement recommendations from the Black Economy Taskforce to strengthen the integrity of the system.
As announced in the federal budget this year, from 1 July 2021, ABN holders with an income tax return obligation will be required to lodge an income tax return.
Additionally, from 1 July 2022, ABN holders will need to confirm the accuracy of their details on the ABR annually.
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Currently, ABN holders are able to retain their ABN regardless of whether they are meeting their income tax return lodgement obligation or the obligation to update their ABN details.
The new conditions have been touted to make ABN holders more accountable for meeting their obligations, while minimising the regulatory impact on businesses doing the right thing.
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