From July 1 2007, businesses with turnover of at least $75,000 per annum ($150,000 in the case of non-profit organisations) were required to register for an ABN and remit GST. Businesses with turnover under $75,000 were able to voluntarily register and these voluntarily-registered businesses are also included in the counts in this release. There are certainly, however, businesses that are actively trading with turnover of less than $75,000 which chose not to register for an ABN or remit GST. The number of businesses in this category is currently unknown to the ABS. Similarly, the same applied prior to 2007 for businesses with turnover of at least $50,000 per annum ($100,000 for non-profit organisations).

Businesses which have Recently Ceased Trading

An analysis of recent ABS surveys indicates that a proportion of businesses which have remitted GST within the most recent five quarters of the end of the reference period had in fact ceased operation by the end of the reference period. In many cases, these businesses had not yet been classified as a LTNR business. The exclusion of LTNRs from the counts in this release thus excludes the majority of, but not all, businesses who have ceased trading.

Businesses which Appeared to have Ceased Trading but are Likely to be Active

Conversely, investigations show that a relatively small proportion (15% on average) of businesses identified as LTNRs at a point in time (and thus excluded from these counts) recommence remitting at a later date. At this stage, it is not clear whether these businesses were not active during the period (in which case their exclusion provides an accurate count) or were actively trading but failing to remit their GST obligations (in which case they were incorrectly excluded).

There are reasons why a business may not respond to the ATO for a period of time and then recommence remitting GST obligations. For example, a business may be in a "start up" phase with minimal or no activity, could be tax exempt or recalcitrant in reporting over a period of time, or could become dormant while undertaking a change in activity. It would be difficult however to categorise LTNR units which later remit into these groupings without a detailed investigation of each unit.

Main Business Address

Businesses can operate in more than one State or Territory, and in these cases are classified to their Main State or Territory. For businesses in the non-profiled population, Main State is derived from the main business address. For businesses in the profiled population, Main State is the State or Territory with the highest employment. Therefore, for some businesses in the profiled population, Main State is not necessarily the State or Territory of the main business address.

Multi-Location Businesses

The Australian taxation system provides flexibility during the new business registration process as it allows businesses operating in single or multiple States or Territories to register on the ABR and report taxation obligations in a variety of ways. For instance, it is possible for a business entity to register for a single ABN regardless of the number of commercial activities it undertakes (sometimes visible in the number of physical "shopfronts" it may operate). Alternatively, multiple commercial activities of a single business enterprise may be registered for separate ABNs, depending on the legal structure adopted by the enterprise. Hence where commercial activities are carried out by a number of different, but related entities, each entity may register for a separate ABN.

This publication therefore may be regarded as providing partial coverage of businesses in a given State. For example, if a business registers for a single ABN, but then operates from many physical locations (or "shopfronts"), coverage will be restricted to the State of the main or "head office" location only. This is particularly relevant for larger businesses, which commonly establish outlets in numerous States and Territories across Australia and also operate from a head office location.

The issues of multi-location businesses are more pronounced for counts at the SLA level, as multi-location businesses may only be attributed to a single SLA. As such, care should be taken not to assume that business counts at the SLA level reflect all business operations within that SLA. Users should be aware of this limitation when using counts of businesses included in this publication and should be particularly cautious in equating the number of businesses, represented by ABNs (and TAUs) with the number of business operations.

In terms of annual turnover values, the transition to a new annual turnover imputation technique has had some effect on this publication's annual turnover size range tables, compared with data included in previous publications. Annual turnover values are based on data reported to the ATO through BAS and include imputation for missing periods. More specifically, where businesses report zero values on their BAS, or have failed to report at all, these data are compared with auxiliary BAS data which are then used for the purposes of assigning annual turnover values. In cases where auxiliary BAS data are not available, an impute based on auxiliary ABSBR data is used.

In terms of employment values, payees data has been imputed for a relatively small number of businesses. The employment data extracted from the ABSBR are generally suitable for the purposes of attributing an employment size classification to each in-scope business.  However, during processing, a subset of problem units were identified and a more robust methodology was developed to ensure all businesses were classified to an employment size range which reflected real world activity. This involved examining the reported employment values of businesses which were known to be affected by recent changes to the ABSBR and imputing values as appropriate based on auxiliary data.  Specifically, BAS wages and salaries and annual turnover data were used to develop a better quality impute.  This methodology is considered suitable for the purposes of classifying businesses into relatively broad employment size ranges.