Changes to Australian Business Number’s (ABNs)

As seen in Woopi News February 2024

Over the last 12 months many Sole Trader ABNs have been cancelled without prior notice. Generally, this is because the ABN holder hasn’t included business income in their Individual Tax Return for a few years. Many people applying for, or reactivating their ABN have been finding that the online application says they are not eligible for an ABN. So, what’s this all about? The ABR has undergone a big tidy up, to ensure that listed ABNs are all active and the ABN holders can be identified. For the past 6 months or so, when applying for an ABN as a trade’s assistant or labourer, a warning has popped up advising the applicant is not entitled to an ABN as they are an employee. Anyone who now selects ‘trades assistant or labourer’ when applying for an ABN as a sole trader, will not be eligible for an ABN. Those that are operating ‘in the form of a business’ will continue to be eligible to apply for and use their ABN.

In December last year, The ATO finalised Tax Ruling TR 2023/4 and Practice Compliance Guideline PCG 2023/2. These documents outline how to correctly classify workers as employees or independent contractors. Business owners now need to determine if their worker is servicing their business or running their own business. Simply saying someone is an independent contractor doesn’t mean they are, it depends on a variety of factors.

So where does this leave Subcontractors currently using ABNs to contract their labour to another business? Generally, the party engaging the worker will be the one responsible for ensuring that their worker is correctly classified as either an employee or an independent contractor. However, if you are a sole trader contracting to another business on a regular basis we recommend you seek advice from your accountant and if your arrangement with a particular business appears to be that of an employee/employer, initiate a conversation so that changes can be made prior to the ATO enforcing these new rules.

photo of stasha dunn principal staysharp accounting

Stasha Dunn - StaySharp Accounting
Liability Limited by a scheme approved under Professional Standards Legislation”

Latest Blog Posts

Registering a business name

Registering a business name

As seen in Woopi News July 2024 Starting a new business can be both exciting and nerve racking at the same time but too often people forget a few important steps. If you wish to trade under a business name, it’s a requirement that it be registered with ASIC. Too often...

2024/25 Federal Budget Update

2024/25 Federal Budget Update

As seen in Woopi News June 2024 While some Budget announcements apply immediately, it’s important to remember that not all announcements can be relied upon as they may require legislated to be passed. Individuals The budget confirmed the reductions in the individual...

5/66 River St, Woolgoolga
NSW 2456

Contact Us

For all your individual tax return, bookkeeping, business tax or SMSF needs, contact StaySharp Accounting.


5/66 River Street, Woolgoolga NSW Australia

Opening Hours

Monday to Friday: 9:30am-5:00pm
Saturday: By appointment

Send a message

Institute of Public Accountants logo
National Tax and Accountants Association logo
Registered Tax Agent 25954211

Liability limited by a scheme approved under Professional Standards Legislation