Calling time out on your business? Some essentials you’ll need to know
Calling time out on your business? Some essentials you’ll need to know
When you first went into business, either buying an established enterprise or starting from scratch, probably the last thing on your mind was the day you would close the door for the last time.
But in a way it’s inevitable, whether through the outcomes from COVID-19, retirement, health reasons or, in a more ideal scenario, pursuing another career. But it’s important for you to know what’s involved when you come to the time when you close your business, as this can go a long way to smoothing the transition.
For starters, it’s important that all your tax issues are finalised before you cancel your Australian business number (ABN), which ceases that business. This allows the ATO to finalise your business’s account and issue any refunds that may be owing.
Step 1: Lodgement and payment
Make sure all lodgement and payment obligations are met, including:
outstanding activity statements
outstanding instalment notices
final fringe benefits tax returns
final income tax returns.
Step 2: Refunds
Request any refunds for accounts with a final tax position in credit.
Step 3: Cancel pay-as-you-go (PAYG) withholding registrations
You can do this by phoning the ATO’s business line (13 28 66) and speak to a customer service representative, or complete an Application to cancel registration form (ask for “NAT 2955”). Or we can do this for you.
Step 4: Cancel the ABN
This step must be completed after the first three steps – this will stop any problems with refunds being delayed and the need for the ATO to contact you (or this office on your behalf). The ABN needs to be cancelled within 28 days of your ceasing business through the Australian Business Register.
Cancelling the ABN will:
cancel registrations for goods and services tax (GST), luxury car tax, wine equalisation tax, fuel tax credits
cancel AUSkeys linked to the ABN
end all authorisations for the business in Relationship Authorisation Manager, preventing access to the online services using myGovID.
After cancelling the ABN, it will pay to keep in mind that you may have a PAYG instalment obligation through to the date of ceasing business, and may still receive instalment activity statements. You are able to vary your PAYG instalment amount if the amount or rate the ATO calculated doesn’t reflect your circumstances due to you ceasing business.
Step 5: Record keeping
You need to keep business records for five years from when they were prepared or obtained, or from when the transactions or acts those records relate to were completed, whichever is later.
Harper Group Pty Ltd – Chartered Accountants Frankston - Ph 9770 1547
Disclaimer: All information provided in this article is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.
Please note we at Harper Group Pty Ltd are not licensed to provide financial product advice under the Corporations Act 2001 (Cth)and taxation is only one of the matters that must be considered when making a decision on a financial product, including on whether to make superannuation contributions. You should consider taking advice from the holder of an Australian financial services licence before making a decision on a financial product.