Payments to Suppliers with no ABN

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Payments to Suppliers with no ABN

Did you know it’s the payer’s responsibility to not only check that a supplier has given you an Australian Business Number (ABN) on their invoice but also to check that the ABN is valid.

This means that you are responsible for checking with ABN lookup to make sure the ABN matches the name on the invoice, also for checking whether GST is applicable or not according to the website.

If no ABN has been completed there are two options:

  1. The supplier needs to provide a “Statement by a supplier” form justifying the reason the payer should not withhold from payment
  2. Withhold 47% tax from the payment and remit this with the next BAS.

Surely the “Statement by a supplier form” ( ) would be the simplest.

Funny thing is I heard of a situation recently when a supplier refused to supply the form. Their reasoning being “ I’m pretty sure your accountant is wrong. I’m a self employed sole trader and have never needed an ABN (unless the rules have changed in the last 6 months. I don’t have a business name, not require to submit a BAS statement and only have a tax file number. It has always been like that for the 24-25 years I have been in business”

Seriously, what rock has this guy been living under and why has no-one ever called him on this before? The scary thing is quite often the business owners pays the full amount of the invoice, only to find out in hindsight  they should have withheld.

Don’t let this happen to you!


Photo credit: Got Credit via Visual hunt / CC BY