Have you checked your supplier’s ABN recently?
As a business owner, you are under obligation to check the validity of your suppliers. It can be easy to let this slip as the invoices pile up from your stockists or tradespeople and you work to keep the business running, but we’ve got a few reasons why it’s worth doing a quick lookup on your suppliers.
The Australian Tax Office (ATO) have been made aware of a number of suppliers that are not using a valid Australian Business Number (ABN) or are not registered for GST — but they have factored GST into their charges. Business owners have then made the mistake of paying the full amount back to the supplier, including the additional ‘GST’ amount. The law applied by the ATO states that the business owner cannot claim this GST amount back, even if the business owner wasn’t privy to their supplier’s lack of ABN registration.
To ensure you are dealing with registered suppliers – and remain in the ATO’s good books, there are five simple things that a business owner must do:
- Check that suppliers have provided a valid ABN.
- Verify that the supplier is allowed to charge GST.
- Upon every transaction, obtain a valid tax invoice from your suppliers.
- When you are considering using a new supplier and prior to any initial payment, check their GST status.
- Check the ABN status on all of your suppliers once a year.
To check a supplier’s ABN, the ATO has assured business owners that their ABN Lookup Tool will provide accurate information on the supplier to enable the business owner to make an executive decision on whether they choose to deal with them.
If you’re still looking for a hand to verify your supplier’s ABN credentials, SWAG Bookkeeping offer a number of solutions to help our clients determine which suppliers they should deal with – and the ones to avoid. Please contact us to find out more.
