A Quick Guide on How to Cancel Your ABN
Written by Bindi Gethen
Whether a small business owner or sole trader, you know that the ABN is at the heart of your business. It’s your unique identity when paying taxes, getting business loans, or any other financial transactions related to your business. Naturally, cancelling your ABN is a major step.
You might need to do this if your business is closing or undergoing a structural change. In Australia, many businesses undergo structural change and seasonal entry or exit. In the December 2023 quarter, in seasonally adjusted terms, the business entry rate was 5.1%, with 133,560 entries, and the exit rate was 4.1%, with 105,362 exits.
In short, whether you’re closing the shop or restructuring it, you should know how to cancel ABN. It will help you plan your new venture with peace of mind.
Let’s find out more about it.
What Is ABN?
As you may already know, ABN stands for Australian Business Number. It is a unique 11-digit number that serves as a public identity for your businesses in Australia. You will need it for different business activities, such as invoicing, taxation, and other government transactions.
ABN is issued by the Australian Business Register (ABR) – a national database that stores information about businesses and organisations in Australia. Whether you’re a sole trader, a partnership, a company, or a trust, you need an ABN to operate your business smoothly.
Things to Do Before You Cancel ABN
Before you Google “how to cancel ABN,” you will need to think this decision through. Two things matter the most before you cancel your ABN.
They are:
1. Check If You Need to Cancel Your ABN
Before cancelling your ABN, carefully consider if it’s necessary. Typically, you will need to cancel your ABN in the following situations:
Closing your business
Changing your business structure (like going from a sole trader to a partnership)
Selling your business
In other words, if you are taking a temporary or seasonal break from your business, you can keep your current ABN active. Sometimes, retaining your ABN makes sense even though you are not actively trading. Also, you may not need to cancel it if you are merely changing ownership.
Pro tip
You should not rush this decision. Think everything through before you start the ABN cancellation process.
2. Pay All Your Dues Before Cancelling Your ABN
If you decide to cancel your ABN, fulfil all your outstanding obligations. This includes outstanding Goods and Services Tax (GST), Pay as You Go (PAYG) instalments, goods and services tax (GST) credit refunds, and income tax. You may also need to lodge activity statements.
Clearing all dues helps you avoid paying hefty legal penalties in future. It also helps in a smooth transition to your new venture. You can check with the Australian Taxation Office (ATO) or consult a professional tax advisor to see if all your dues are paid.
Choose A Suitable ABN Cancellation Process
You will need to inform the ABR within 28 days of ceasing business operations that you want to cancel your ABN. After which, you can choose one of the three ABN cancellation processes.
Let’s break it down for you.
1. Cancel Your ABN Online
This is the easiest and fastest ABN cancellation process. But your ABN needs to be linked to your MyGovID.
- Go to the Australian Business Register (ABR) website.
- Go to the online service section and click update ABN details.
- Log in using your MyGovID.
- Go to the section where you can manage your ABN.
- Select the ‘Cancel ABN’ option.
- Fill in the required details.
- Review all your information.
- Submit your cancellation request.
Usually, the cancellation will be effective immediately. However, it can take up to two business days to reflect in the ABR records.
2. Cancel Your ABN via Phone
You can also cancel your ABN via phone. But first, make sure you are authorised to update your ABN details. Here’s how you can do it.
- Keep your ABN details and Tax File Number (TFN) ready.
- Call the ABR on 13 92 26 (in Australia) or + 61 2 6216 1111 (outside Australia) between 8 am and 6 pm, Monday to Friday.
- Verify your identity with the ABR representative.
- The representative will guide you through the process.
- Once everything is confirmed, the ABR representative will process your request.
3. Cancel Your ABN via a Tax Agent
The third ABN cancellation process involves consulting a registered Tax Agent. Your agent will ensure that you don’t have any lodgement or tax obligations before putting in your request. In addition to your business details, the agent may require written authorization to act on your behalf.
Once they have all the details, your agent will handle the cancellation request. They will provide you with the confirmation of your request. Unlike other methods though, your tax agent may charge you a flat fee for cancelling the ABN.
4. What Should You Do After Cancelling Your ABN
After successfully cancelling your ABN, promptly update all your business details in government records. Generally, you will get an online confirmation immediately. However, other processes for ABN cancellation can take up to 28 days. Wait for the confirmation from ATO. Once confirmed, let everyone know, including other government agencies, clients, and vendors.
5. Checklist for Cancelling Your ABN
The process can be tricky, especially if you are cancelling ABN for the first time. Here’s a quick checklist for you:
- Check if you really need to cancel your ABN.
- Pay all your taxes and dues.
- Decide how to cancel your ABN – online, by phone, or tax agent.
- Complete the ABN cancellation process.
- Wait for confirmation from the ATO.
- Update your business records.
- Inform your customers and vendors about the cancellation.
Frequently Asked Questions
You might need to cancel ABN if you’re closing your business, selling it, or changing its structure. You may not need to cancel it if you are merely changing ownership.
Make sure to pay all your business taxes and any money you owe. This includes paying your outstanding Goods and Services Tax (GST), Pay as You Go (PAYG) instalments, and repaying goods and services tax (GST) credit refunds. You will also need to lodge your activity statements.
You can cancel it online through the ABR website, by phone, or with the help of a tax agent. For cancellation via phone, call 13 92 26 (in Australia) or + 61 2 6216 1111 (outside Australia) between 8 am and 6 pm, Monday to Friday.
Yes, you can reactivate ABN if your business starts again. But you will need to re-apply for it through the Australian Business Register (ABR).
You need to wait for the ATO confirmation. After the confirmation, update your business records and inform your customers and vendors about the cancellation.
Most of the ABN cancellation processes are free. But you should check with your tax agent if they charge any fees for cancelling your ABN.
No, you cannot have more than one ABN for a single business entity in Australia. However, you can run multiple businesses under the same ABN, provided they have the same structure. You need to apply for a new ABN if your new businesses have different structures (like one partnership and one sole trader).
Get Ready for a Smooth ABN Cancellation Process
You can cancel your ABN in minutes using the online process. But, ensure you’ve lodged all your activity statements. You also need to pay your outstanding Goods and Services Tax (GST), PAYG instalments, and GST credit refunds. In short, you need all your books in perfect order before even thinking about cancelling your ABN.
The Bookkeeping Studio can help you clear all your dues and keep every penny accounted for. Our skilled team will prepare you for a swift ABN cancellation.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
