Tidying Up ABNs
The ATO is currently reviewing and cancelling ABNs that are no longer required, particularly for investment entities. In the past, accountants often applied for an ABN when setting up a new company or trust, regardless of whether the entity was actively trading. However, an ABN is only needed if you’re carrying on a business or enterprise. If your entity is purely an investment vehicle (e.g. holding shares or property without active trading), you may not need an ABN. The ATO’s clean-up is aimed at reducing unnecessary registrations and keeping records accurate.
Who Needs an ABN?
You must apply for an ABN if you:
– Are running or starting a business (as a sole trader, partnership, company, or trust)
– Provide goods or services with the intention of making a profit
– Need to register for GST because your turnover is $75,000 or more
– Operate as a contractor who needs to provide an ABN to avoid PAYG withholding
You generally don’t need an ABN if you’re only earning investment income (such as dividends, interest, or rent) without actively carrying on a business.
Recent ATO Reviews
We’re also seeing an increase in ATO reviews and data-matching. In particular, the ATO is cross-checking employer Single Touch Payroll (STP) data against contributions received by super funds. Just this week, we saw reviews raised for companies where only the directors are employees and superannuation weren’t paid. It’s a reminder that even closely held businesses are being monitored closely, and employer obligations, especially super, remain a priority area for the ATO.