As you have not reported any business income in your 2007 and 2008 income tax returns, it is unlikely that you are carrying on an enterprise.

By application of Willie Sutton’s principle, the tax office is primarily interested in profits. No profit? No ABN.

Why am I responding to you? Who knows? A kind of neurosis I guess. it’s certainly not rational.

The original letter from the ATO doesn’t say the recipient hadn’t completed their tax returns> It says they have completed their incomes.

Sigh . . .

No. You need an ABN to run anything bigger than a paper round. You are required to have an ABN regardless of whether you are registered for GST or not. You can be paid – short term – absent GST registration because you claim the GST later. There are some exceptions to this but they are specifically written into the legislation. Taxi drivers with low turnover are a good example.

You cannot open a bank account without an ABN, you can without GST registration. You cannot even be insured without one and insurance is often a requirement placed on you by clients.

ABN’s and GST registration are entirely separate issues. An ABN is like a tax file number, you cannot, just cannot operate without one. It is a gateway to being able to operate at all.

So generally speaking you need an ABN. Short of asking the ATO to approve a drug smuggling cartel, why is there any discretion at all? To refuse means they have to assess whether or not an otherwise legitimate activity meets some criteria. What are those criteria? Don’t know.

To insist on the right to delay means there might be some economic damage in the meantime, and in the case of refusal it would mean the ATO would have terminated a legitimate business activity for a purely tax related purposes. You’re familiar with Part IVa of the tax act? The bit that allows the ATO to set aside a legal structure if its primary purpose is avoidance?

This is the flip side. The ATO can apparently “set aside” (read prevent from operating) legitimate businesses, or delay their cash flows, solely on its own whim.

There are low docs you can get without an ABN. And I don’t know if you were implying as Niall was saying, that it’s the ATO’s business to somehow help out the low doc industry by providing it with verification of the state of someone’s business. If they want that they can ask and get permission to check books, records, tax returns, credit records etc.

Also for the benefit of others, the person who received the ABN note completes their tax return on time every year.

Also, strictly speaking, ABNs are only relevant to the BAS returns, and not the income tax returns. I would be surprised if many business operators are so very lackadaisical in relation to the BAS as they are with the income since they can’t get input tax credits refunded otherwise (if they are dodgy then GST paid will exceed GST charged and they are net refund).

was told I would have to wait for 28 days for the issuance of an ABN (this is not related to GST registration – thats an entirely separate issue

Not really unrelated – ABNs only exist to facilitate GST. So unrelated in a very related way :)

DD’s comments seem quite sensible to me.

And yes, if you want a low doc loan because you’re self employed you’ll need an ABN. And if you’re not really self-employed but want a low doc loan anyway then getting hold of a zombie ABN would be useful.

I registered a new company a while back, and quite unexpectedly was told I would have to wait for 28 days for the issuance of an ABN (this is not related to GST registration – that’s an entirely separate issue)

I don’t get it. I am required to have an ABN to conduct a business, yet appararently issuance of the ABN is a discretion of the ATO? Huh? Do I now have to submit a business plan to the ATO and get approval or something?

After all I’m not aware that they withhold tax file numbers from other participants in the economy. What makes an ABN any different?

(And before anyone complains, yes this did throw a spanner in the works of real economic activity, it delayed payments to my new company by 6 weeks because I couldn’t open a bank account and I spent a few happy weeks fending off a nervous bank manager.)

I have no idea what you’re talking about – but please don’t fill me in. I know as much as I want to know.

Oh Come on, Nicholas! Surely youre not advocating that business people, small, medium or large it doesnt matter a jot, should be permitted to go along year after year without submitting taxation returns, but still enjoy the benefits of a GST registered ABN??!

I’m going to go right out on an limb here and presume that the ABN in question was not actually trading, in which case there are no “benefits” involved. If the ABN was trading then my understanding is that they would be obliged to fill in BAS each quarter.

With regard to the lo-doc loans, I was not aware that the ATO offered these things. Are they difficult to get? What sort of interest rates are we talking about here?

if you cant think of anything better for governments to fund in a depression, its better to fund people digging holes in the ground and filling them in than to let people go idle

That’s a remarkably versatile explanation.

This tactic by the ATO has been going on for some time now and frankly, good thing too, as far as I’m concerned. I’m sick of dealing with ignoramuses who think it’s some kind of right to continue to borrow, supposedly for business purposes, on lo-doc products because their tax returns aren’t up to date. Granted, the lo-doc product has a place, but I have absolutely no sympathy for those stung by the ATO in this manner because they’re too bloody lazy to do their tax. As a wage earner, I have no choice, so why should a SME be granted any leniency beyond the usual nine month way-period granted to businesses for submission?