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GST Q&A ‘ What do we do when the ABN does not match the name of the company on the invoice?

What should be done if the ABN of a creditor’s invoice is not the same as the one resulting from a search on the ABN Lookup website?

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Question

We currently use the ABN Lookup to verify creditor details prior to setting the creditor up in our system. What do we do when the ABN does not match the name of the company on the invoice? We have many cases of this occurring including where the ABN is registered to a trust and there is no relation between the name of the trust and the name of the company.

I wonder if you can advise what our obligation is as far as verifying the ABN details that we have been provided with prior to paying the creditor.

Answer

With regard to your comments that the ABN provided does not match their trading name, this is more common than many expect. This can occur for many reasons – often due to the business being operated by a trust with a corporate trustee: the trust is the entity carrying on the business and has its own ABN (the trust is a separate entity for ABN/GST purposes), but the trading name may be that of the trustee company (or a nominee company) which may not have its own ABN.

It is good business practice and worthwhile checking the ABN Lookup register, as in most cases this should clarify the name of the entity for the ABN quoted. However, in situations where the ABN does not match the name on the invoice, we recommend contacting the entity and asking them to clarify the name of the relevant entity making the supply and the nature of the relationship between that entity and the entity name used on the invoice.

In addition to the commercial issue of correctly identifying the entities that you are transacting with, from a GST viewpoint the main issue is whether you are holding a valid tax invoice so that you are entitled to claim available GST credits. It is also important that an appropriate ABN has been quoted to you. Otherwise, if you have not been quoted the correct ABN then you may have an obligation under the ‘no ABN withholding’ rules to withhold from the payment.

Disclaimer: This article is based upon information available as at the time of publishing and may be subject to change.