In November last year, Treasury released draft legislation for consultation regarding new conditions for ABN holders.
Schedule 1 to the bill amends the A New Tax System (Australian Business Number) Act 1999 (ABN Act) to provide that the Registrar may cancel a person’s registration in the Australian Business Register where they fail to lodge returns for two or more income years and the returns remain outstanding.
Under the proposed law, their registration will also be cancelled where a person fails to confirm the accuracy of their details held by the Registrar in a 12-month period together with confirmation that their ABN is still required.
In a submission to Treasury, Chartered Accountants Australia and New Zealand said it supports the measures in principle, it made a number of recommendations.
The accounting body noted that the draft provisions refer to the ABN holder being required to have “made arrangements to lodge” to either avoid cancellation or seek reinstatement.
The submission noted there is a lack of clarity as to what this means.
“Is it confined to the ATO providing a deferral of time to lodge? Or would engagement with the ATO and an expressed intention to lodge suffice?” it questioned.
“For clarity, guidance should be issued as to whether the lodgement of a ‘return not necessary’ or ‘further returns not necessary’ notification is sufficient to satisfy the lodgement requirement or whether a tax return is required.
Clarity should also be provided, it said, on whether the ATO will notify the Registrar when an arrangement has been made to lodge, or if the onus remains on the ABN holder to present information to ABRS staff for their consideration.
“An automatic and immediate notification system from the ATO to ABRS is preferred,” the submission stated.
CA ANZ has also called for a delayed commencement date of 2026 for the proposed changes.
The submission noted that this would minimise administrative costs by integrating as these changes would be integrated once into the Modernising Business Registers (MBR) program rather than twice.
“The consolidation of registers under the MBR provides the opportunity to introduce efficient and simple registration processes,” the submission explained.
“As existing registers are moved to the Australian Business Registry Services (ABRS) platform businesses will need to provide a single, annual, confirmation of details and notify any changes as and when they occur. Other government agencies will then rely on the ABRS as the source of truth and draw on this information as required.
The submission said that this limb of the measure would therefore be best deferred to be incorporated into the broader MBR Program, rather than introducing another form for the 7.5 million ABN holders who are already struggling to meet all government compliance requirements.
“At this stage, the commencement date of 1 July 2024 no longer aligns with the timeframes for the broader MBR Program which has been extended to 2026,” it stated.
Extending the commencement date, it said, would also provide ABN holders, especially SMSFs, sufficient time to ensure that their income tax return lodgements are up to date.
“CA ANZ understands that some SMSFs and businesses impacted by COVID or natural disasters may have recently experienced difficulties in being up to date,” the submission stated.
“If there is an issue with lodging a particular tax return or the financial accounts that relate to that tax return, then tax agents are unable to lodge subsequent tax returns due to the way ATO systems operate.”
“Resolving issues with financial accounts can take a substantial amount of time which means that there may be a large cohort of SMSFs or businesses that have two or more tax returns outstanding.”
A delayed commencement date accompanied by an extensive education campaign about these proposed changes are needed to ensure that these entities have time to lodge tax returns and retain access to their ABN, the submission stated.
“Alternatively, consideration could be given to allowing the retention or reinstatement of an ABN if there is an arrangement in place to lodge outstanding returns by a particular date,” it said.
