When a buyer makes payments to a supplier for goods or services to a business, the supplier should generally quote an Australian business number (ABN). They can either quote their ABN on an invoice or another document related to their goods and services.
In this article, you will find out what is the importance of issuing a statement by a supplier, how to create one, and other relevant information.
Sometimes, a supplier will not provide their ABN. When this happens, the payer will have to withhold an amount from the payment regarding that supply. This is known as ‘no ABN withholding’.
However, certain suppliers are not required to quote an ABN to a payer. In this situation, the supplier can fill out the Australian Taxation Office (ATO) statement by a supplier form. This is used to justify the payer not withholding the payment to the supplier.
A statement by a supplier form summarises a payer’s position with a specific supplier. It doesn’t create or record an obligation for the payer to pay the supplier. There are many reasons why a statement by a supplier is made. These may include:
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If you are an individual or business that supplies goods or services and one of the following applies, the statement by a supplier ATO form might be relevant to you:
You are not carrying on an enterprise in Australia
Suppliers with any of the following traits are not allowed to use this form:
If the supplier is entitled to register for an ABN or operates a business, they cannot use the statement by a supplier form.
If the supplier makes a false or misleading statement, and the payer has reasonable grounds to believe that this is indeed the case, then the payer can withhold 47 percent of the total payment for the supply. The ATO established this rule on 1 July 2017.
Before you start filling out the statement by a supplier form you need to check if you are eligible.The ATO states who is eligible at the top of the form.
Complete this statement if the following applies:
You will find that the statement by a supplier form consists of blocks where information should be filled in. In these blocks, you must write in clear block letters with a black pen only. When using block letters, you need to insert one character or letter per box. When choosing an option, mark an ‘X’ in the applicable boxes.
In addition, a payer can check the ABN records of a supplier by calling 13 72 26 or visiting abr.business.gov.au, which is available 24 hours a day, seven days a week.
The statement by a supplier form is divided into two sections. This includes
In this section, the supplier must include their full name and address, along with their suburb, state, and postcode. You will also be required to add the reason for not quoting an ABN.
The form will provide several reasons why the statement is relevant to you. Next to the appropriate reason, you must insert an ‘X.’ This will also determine whether you are eligible to receive the payment.
In the declaration section, you are required to fill in your name again and add your signature. This is to declare that under the pay-as-you-go (PAYG) guidelines administered by ATO, you are not quoting an ABN for the current and future supply of goods or services for the reason or reasons that you have stated.
It is important to note that you might receive a penalty if the ATO finds out that you deliberately made a false or misleading statement. The statement must be sent to the payer you are supplying your goods or services to, not the ATO. The payer should then keep the document and other records relating to the supply for the next five years.
The statement by a supplier is a valuable form designed to protect suppliers and ensure that they get the money they may be entitled to. If you find this article helpful, check out our QuickBooks Resource Centre, which has various tips and informative articles to help small businesses. This includes our tried and tested QuickBooks invoicing software and QuickBooks cloud accounting software, both of which our clients love.
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