An announcement in the 2019 federal budget looks to implement further obligations on Australian Business Number (ABN) holders. This is an expansion of black economy measures which have been implemented over the past few years.
From 1 July 2021, the proposed measure introduces an income tax return obligation for all ABN holders. That is, all ABN holders will be required to lodge their income tax return each year.
Also, from 1 July 2022, the proposed measure introduces an annual confirmation with the Australian Business Register (ABR). All ABN holders will be required to confirm the accuracy of their details with the register.
Since being introduced in July 2000 ABNs have been pretty easy to come by and their use has not been well monitored by the ATO. That leads to tax leakage where well-meaning payers pay on ABNs where the holder of the ABN does not report the income to the ATO. Surprising it has taken nearly 20 years to figure that one out. Businesses should always take care when paying an individual who quotes an ABN. Where the contract is essentially for the labour of an individual the existence of an ABN may not absolve the payer of PAYG Tax and SGC Superannuation obligations, or for that matter compliance with industrial relations laws such as the Fair Work Act 2009. If the ABN is attached to an entity such as a company, trust or partnership rather than an individual, the risk is far less. It is always good practice to check the ABN of small contractors you deal with at: https://abr.business.gov.au/