For many business owners, the decision to cancel ABN arises from selling, changing, or closing their business. An ABN, the unique 11-digit business number, links your business to the government. It also carries essential tax and legal obligations. Within 28 days of significant changes, it’s necessary to update or cancel your ABN. Failing to do so can lead to tax complications and unpaid employee income tax withholdings.

Business owners authorized to update ABN details have outlined specific steps to avoid issues. This article provides a step-by-step guide covering online ABN cancellation through myGovID and other methods. Additionally, essential tips help settle outstanding obligations and maintain compliance.

Get your ABN registration sorted effortlessly with TaxLeopard! Self-employed individuals and contractors in Australia benefit from our one-stop accounting software, which features CPA accountants. Sign up now to receive free ABN registration services and manage your business smoothly!

Deciding to Cancel Your ABN Registration?

Businesses must evaluate their current status before cancelling an Australian Business Number (ABN). Considerations include business structure, tax obligations like GST, PAYG withholding, and luxury car tax. A registered tax agent can help determine if closing is appropriate.

Before cancelling the ABN, businesses should update accurate ABN details with the Australian Business Register (ABR).

Eligibility for Cancellation:

Eligibility for cancelling an ABN hinges on specific criteria set by the Australian Taxation Office (ATO). Business owners must confirm their business structure has changed or closed, or that registration is unnecessary.

Businesses must have resolved outstanding obligations, such as activity statements or payment obligations, before cancelling.

Contacting the ATO or a registered tax agent can confirm eligibility.

Preparing for ABN Cancellation

Reviewing Financial Obligations:

Settle all outstanding financial obligations before cancelling the ABN. Finalize GST, WET, luxury car tax, and fuel tax credits. Ensure activity statements and PAYG lodgments are up-to-date, as the ATO requires. A registered tax agent will advise on financial obligations, promptly addressing compliance matters.

Completing Necessary Documentation:

Necessary documentation must be completed through ABR’s online services using myGovID. Ensure the details match current business records, with government agencies and the ATO informed of any changes. The ABN cancellation request form is available online, or by calling the ATO directly at 13 92 26, Monday to Friday. A confirmation email will follow once the cancellation is finalized.

Steps to Cancel ABN

Step 1: Review Eligibility and Business Status

Assess whether changing your business structure or closing operations makes you no longer eligible for an Australian Business Number (ABN). Businesses still active or operating under altered structures may need to update ABN details instead of cancelling. Selling the business or operating with significant changes necessitates informing the Australian Business Register (ABR) within 28 days.

Step 2: Evaluate Tax and Reporting Obligations

Address tax obligations like unpaid employee income tax withholding, Goods and Services Tax (GST), and Pay As You Go (PAYG) withholding. Ensure all activity statements have been lodged and payments submitted to the tax office. Consult a registered tax agent to determine any outstanding obligations and organize records for the Tax Office’s online services.

Step 3: Access ABN Cancellation Services

Use myGovID, your business registration number, and login credentials to access government online services for a step-by-step guide. Alternatively, call the ABR on 13 92 26, available Monday to Friday between 8 am and 6 pm. Be prepared to verify business details, including the unique 11-digit ABN and tax file number.

Step 4: Complete and Submit the Cancellation Application

Authorized representatives should fill out the “Application to Cancel Registration” form (NAT number 2955) and submit it through the Australian Business Register. Old ABNs must be deactivated, with business activities reviewed and reported. Make sure to inform relevant government agencies you deal with, using different ways to cancel.

Step 5: Confirm Cancellation and Maintain Compliance

After cancellation of your ABN, retain your login credentials for business records and manage any remaining legal and tax obligations. Confirm cancellation through the ABR and consult a registered tax agent to ensure compliance. Notify government agencies and finalize your relationship with the Australian Taxation Office (ATO) while maintaining accurate records.

Managing Outstanding Obligations

After deciding to cancel ABN, managing outstanding obligations will be crucial. These responsibilities could include tax filings and finalizing GST, PAYG withholding, and activity statements. Ensure any unpaid employee income tax withholdings or other liabilities are addressed. Additionally, notify relevant government agencies and update ABN details with the ATO. Follow these tips:

  • Finalize and submit any overdue activity statements.
  • Settle outstanding tax obligations, like GST and PAYG withholding.
  • Contact the ABR within 28 days to officially cancel your ABN.

Conclusion

To cancel your ABN, consider your business status first, as there may be different ways to proceed. Update your business records through the ATO, or use government online services, such as MyGovID, for your business. Submit the “Application to Cancel Registration,” following a step-by-step guide for ABN cancellation. Ensure compliance by notifying the Australian Business Register within 28 days, especially if you sold the business or changed its structure. Legal and tax obligations must be fulfilled before ceasing business activities. Are you ready to update your ABN and manage obligations before cancelling it?

FAQs

1. Does an ABN need cancelling if the business is sold?

Yes, a business owner must cancel an old ABN and register the new owner.

2. What are the consequences of not cancelling an ABN?

Legal and tax obligations remain, leading to unpaid tax liabilities.

3. How long does it take to process an ABN cancellation?

Typically, processing is completed within 28 days after submitting the request.

4. Can an ABN be reactivated after cancellation?

No, a new application must be submitted to register a new ABN.

5. Is cancelling an ABN mandatory for sole traders?

Yes, sole traders should cancel if no longer entitled to an ABN.