I have two ABNs - a sole trader and a company. Same business, one followed the other. Do invoices issued under the first ABN have to be accounted for in the BAS for that entity, or can they be shifted to the company BAS if paid after it was set up?
Please note, I am not a qualified accountant or registered bookkeeper however I did speak to a registered Government BAS Agent about your question and their guidance was, as far as the Australian Tax office would be concerned, there are two separate entities and the invoices issued under the sole trader ABN should be dealt with through that entity and that entities bank account.
They also suggested you could cancel the sole trader ABN after you complete your final BAS and then possible reissue outstanding invoices to the clients through the new entity advising them the details have changed as you are now operating as a company.
Please accept this as third party feedback via a registered BAS agent.
It is advisable you speak to your own accountant or bookkeeper as they may have a more in depth understanding of your business, how it has been set up and advise accordingly.
I hope the business is going well for you
Hi Todd, the ABN and the GST relate to a specific entity. So in the scenarios you mentioned above any invoice issued with the sole trader ABN would have to be lodged for BAS purposes under the sole traders ABN.
There are many differences between your responsibility as a sole trader and that of a company. The ATO has a lot of information that may assist you further. www.business.gov.au then search key differences between sole traders and companies.
I hope you find this information useful.
Back to Business Bookkeeping
I'm going on a tangent here.
I suggest that maybe you hold onto your sole trader ABN and don't cancel it until your Company has been running with GST registration for 2 years.
Since your self employed; financials are not always up to scratch. Lenders usually require 2 years GST registration if applying for a Low Doc home loan or business loan.
Just food for thought if you are thinking of borrowing soon.