What happens if you use someone else’s ABN, whether by mistake or on purpose?
The short answer: it’s a serious offence that can lead to hefty fines, ATO investigations, or even criminal charges. Here’s what you need to know to stay compliant and protect yourself.
Why It’s a Serious Issue
An ABN identifies who is earning income and who’s responsible for paying taxes and GST. If you use another person’s ABN to invoice or register for ATO-linked services, you’re misrepresenting your business identity, even if it wasn’t intentional.
That means the real ABN holder could be held liable for your income tax, GST, or superannuation obligations, while you could face ATO scrutiny and potential penalties for misrepresentation or fraud.
Legal and Financial Consequences
- ATO Penalties and Fines
Using someone else’s ABN is a breach of Australian tax law. The Australian Taxation Office (ATO) may impose:
- Significant financial penalties (potentially exceeding $10,000)
- “No ABN withholding” where 46.5% of your payments are withheld by the payer
- Up to 2 years in prison for deliberate or fraudulent misuse
These consequences apply whether you were aware of the misuse or not. Intent doesn’t erase liability.
- Tax Liability for the ABN Holder
If you’ve been using someone else’s ABN, any income you earned may be attributed to the ABN holder. That means they could be held responsible for:
- Paying income tax on your earnings
- Lodging incorrect BAS or GST statements
- Unpaid superannuation obligations
Even worse, the ATO may investigate both parties to determine who earned what, a stressful and time-consuming process for everyone involved.
- Refund Fraud and Criminal Offences
Using another person’s ABN to claim GST refunds, lodge BAS statements, or register a business that isn’t yours may be considered refund fraud.
“Registering for an ABN and applying for GST refunds when you don’t own or operate a business is fraud.”
—ATO, on GST Refund Fraud (ato.gov.au)
If proven intentional, this could lead to repayment of funds, prosecution, and even jail time.
- Reputational and Identity Damage
For the legitimate ABN holder, misuse can damage their reputation, trigger audits, and affect business relationships.
If your ABN has been used without consent, it may qualify as identity theft. In this case, you should contact:
- ATO Client Identity Support Centre: 1800 467 033 (Mon–Fri, 8am–6pm AEST)
- IDCARE: 1800 595 160 (for identity theft support and recovery)
What To Do If You’ve Used the Wrong ABN
Mistakes happen and the ATO recognises that not all ABN misuse is intentional. The key is to act quickly and honestly.
Here’s what to do:
- Stop using the ABN immediately.
- Inform the ABN holder (if you know them). They may need to notify the ATO or the Australian Business Register (ABR).
- Contact the ATO and explain what happened. Being transparent can help reduce penalties.
- Keep detailed records of all communications, payments, and invoices related to the error.
“We are urging anyone already involved to come forward now on a voluntary basis rather than face tougher consequences later.”
— ATO, on Refund Fraud
Taking responsibility early can make a big difference in how the situation is resolved.
How to Stay Compliant
To avoid issues with the ATO:
- Always apply for your own ABN through the Australian Business Register (abr.gov.au).
- Keep your business records, invoices, and registrations accurate and up to date.
- Seek professional advice from a bookkeeper or tax agent if you’re unsure about compliance.
If you’re a freelancer, contractor, or small business owner, having your own ABN isn’t just a legal requirement. It protects your credibility and ensures you’re paid correctly.
Using someone else’s ABN, even accidentally, can lead to serious legal and financial problems. The safest approach is to use your own ABN for all business activities, keep your tax records in order, and contact the ATO right away if you realise something’s gone wrong.
If you’re feeling unsure about your tax setup or ABN registration, Business Genie can help.
Book a free 30-minute chat with us and we’ll walk you through your options, explain your obligations, and help you keep your business compliant and protected.
