Home – New Forums Starting your journey ABN Issue – am I in trouble?

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  • #969837
    Andy_SA
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    Hi everybody – very new to the forum, mostly joined simply to ask this question…

    A long time ago, not so long after ABNs were first introduced, when I was about 16 I was offered some contract work as a web designer which I wanted to do, at the time I thought I needed an ABN to do this so my mum registered one for me at the time.

    Not long after I found out I didn’t really need one as the incredibly small amount of money I was making from this work was considered a hobby and I didn’t have to pay tax on it.

    Now, the problem starts here, I’ve recently made the decision to start my own small business after some years of working in this field and being just about to finish my degree, and I’ve started doing the research into tax and legal obligations, upon getting to the ABN I found the ABN my mother registered for me when I was 16 is STILL REGISTERED and STILL ACTIVE

    I have never been contacted about this, and as I didn’t even know it was still registered I obviously haven’t been doing any BAS returns or anything along those lines…however I also haven’t been running a business, though if I’m right you’re supposed to submit a BAS regardless

    Now that I need the ABN I’m not sure what to do – do I just start submitting BAS statements and ignore the previous years of inactivity – do I cancel the current one and start again?

    My main concern is if I have some massive fine accumulated somewhere from years of not returning a BAS – as you can probably tell I really don’t know much about tax, can somebody give me some idea about what I need to do here?

    And maybe some sort of indication as to whether or not I’m in trouble over this

    #1041178
    Warren Cottis
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    Andy_SA, post: 49687 wrote:
    Now that I need the ABN I’m not sure what to do – do I just start submitting BAS statements and ignore the previous years of inactivity – do I cancel the current one and start again?

    My main concern is if I have some massive fine accumulated somewhere from years of not returning a BAS

    A BAS is for reporting your tax obligations to the ATO

    Generally speaking you register your tax obligation activities with the ATO… for example, you register for GST or register with the ATO that you are going to have employees.

    The ATO would then send you a BAS every quarter.

    Since you simply applied for an ABN and did not advise the ATO of other tax aspects then there is no BAS to lodge.

    Give the ATO a call to ease your mind further… most of the people there are quite nice

    Your decision now is whether to register for GST which would trigger a BAS form being sent to you by the ATO

    It might be time for you to become friends with one of the great accountants in this forum

    #1041179
    Andy_SA
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    Thanks for that Warren – it did in fact put my mind at ease. Just quietly, I stayed up all night reading about ABNs and BAS trying to figure out what trouble I might be in…luckily I wasn’t registered for GST so it’s not as bad as I first thought

    However I did find out that you’re only supposed to register an ABN if you intend to run an enterprise and registering for an ABN otherwise is an offence, so I’m still a bit worried about this.

    Will definitely be making friends with an accountant in the very near future.

    #1041180
    Warren Cottis
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    Andy_SA, post: 49698 wrote:
    However I did find out that you’re only supposed to register an ABN if you intend to run an enterprise and registering for an ABN otherwise is an offence, so I’m still a bit worried about this.

    You intended to run an enterprise but unfortunately ended up with a hobby… happens to a zillion start up businesses.

    The ATO would kill small business entrepreneurship in Australia if they were nasty to you. I think you are fine.

    #1041181
    ICT Guru
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    Hey Andy!

    congrats on starting your new business. Welcome to the party!

    I had a similar issue when I started my current business. As a kid I did web development and registered an ABN but managed to re-use the ABN for my new business.

    Like you I read up on ATO BAS information and even after studying taxation law found it a little bit confusing. So needed help from someone and I was just so frustrated by it all that I ended up ringing the ATO and asking them to clarify what exactly I needed to do.

    Totally get that you’re nervous because they might slap you with extra fines but oddly enough they were fantastic. Explained everything to me and in my case they helped me sort it all out over the phone. No dramas at all.

    Give em a call. Remember if they want businesses to pay taxes they have to work with them in order to do it.

    Good luck Champ!

    AJ~

    * * * * * * * * * * * * * * *
    Ever frown at your computer?
    http://www.31days.com.au/conquer-your-computer

    #1041182
    James Millar
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    You have nothing to worry about.

    Just be careful going forward with regards to adding a GST registration. If The business acquires assets whilst not registered for GST and then registers and then disposes of a business asset there can be GST on the disposal – even though no credit was claimed on the way in. In other words set your GST start date to a time before any major business assets were acquired so that you can claim the credits.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1041183
    Jake@EmroyPrint
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    Just to put your mind futher at ease (In case those above haven’t as yet) You have nothing to worry about.

    There was a 3 year gap between when I first registered my ABN and when I started trading… (3 Business ideas later mind you), spoke to the ATO about this explaining at the time I thought that was what I wanted but circumstances delayed this.

    Contrary to what a low of people believe, the ATO I have found, try their absolute hardest to make it easy for us to be business (Minus their long hold times of course) But apart from that, they are incredibly understanding and helpful.

    – Jake

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