It’s “as random as hell” but the ATO can take your business identity away from you so you can’t work as an enterprise for a living. They do this when you or an organisation you have appear on their radar.
You may be in a position where this is the only way you are able to get work. You may have been on their radar because you hadn’t completed your tax for a long time, or they just needed to pick on someone, so you may have just picked up the short straw and a hail of garbage will rain down on you.
The merry go round is a drama, they do a review and decide that you are not carrying on a business and take your ABN from you. You can’t write business invoices and you now are working out how to pay rent, feed your family or whatever else.
When making an appeal… guess who reviews the appeal? Surprise, surprise, the ATO. Their decision making process is not transparent, and the test of whether someone is an employee or eligible to keep using an ABN is quite complicated, packed down with 1,000 of pages of common law, yet on the ATO website they have knocked this down to just 6 questions.
So, if you are carrying out an enterprise with an ABN here are some ideas that are important:
- Have your tax up to date – that keeps you off their radar
- Make sure that you actually do keep records and claim what you can. Have business insurance and have the amount you use your vehicle for business claimed.
- If you are questioned by the ATO, don’t answer them – seek legal help. Don’t ignore them, but have the right help to deal with this.
You don’t ever want the problems of losing your ABN and the grief that it causes. We currently have a case like this, and we did find quite a quick solution, but remember if you are in business – work and behave like you are in business.
Better still, look up and organisation called “self-employed Australia” and join them. When we get queries we use this organisation as a default setting, but we usually assess our client’s situation with them as well. https://www.selfemployedaustralia.com.au/ATO-Campaign/reform-the-ato-now
I spent an hour viewing a blog on Sunday. Its run for a group that give services as virtual assistants and transcribers etc. These are people who are offering a service, and they are “on-shore” in Australia working, yet the ATO has had a go at them. Just replace the name of their industry with yours and you will understand what can happen.
Bloody irony – here are Australian businesses losing their ABN, yet the obvious replacement is outsourcing overseas.