After you start a new business, it’s important to make sure that your company is compliant with business regulations before you start trading. There are several important elements associated with registering a business in Australia, including the identification of a business structure, registering a company name, and getting a Tax File Number (TFN). However, getting an Australian Business Number (ABN) is also crucial. Learn more about how to get an ABN.
What is an ABN?
The ABN is a unique, 11-digit number (formatted as a 9-digit identifier and 2 check digits) that is used to identify your organisation to the government and the community. Having an ABN is useful for a couple of different reasons, as it allows you to:
Claim energy grants credits
Identify your business when invoicing
Claim goods and services tax (GST) credits
Get an Australian domain name
Avoid pay as you go (PAYG) tax
If you don’t supply an ABN number when you invoice for goods or services, the supplier may be obligated to withhold tax from their payment in accordance with the PAYG withholding scheme, which is why it’s vitally important to learn how to apply for an ABN before you start trading.
Does my business need an ABN?
It’s important to remember that you may not be eligible for an ABN. First, let’s look at who does need to understand how to get an ABN. You’ll need an ABN if you’re:
Carrying on or starting a business
A Corporations Act company
Making supplies that relate to Australia’s indirect tax zone
By contrast, you may not be able to get an ABN for work you undertake as a contractor or employee. In addition, renting out residential property rarely leads to PAYG or GST withholding obligations, which means that property investors may not need to apply for an ABN.
How do I get an ABN?
Once you’ve determined that you need an ABN, you can apply online. You will need to know a couple of important pieces of information before you begin the application process:
The structure of your business (sole trader, company, partnership, etc.)
Proof of your identity
Details of your business associates and activities
If your application is successful, you’ll receive your ABN immediately, and you can start applying for business registrations like GST. Plus, your details will be added to the Australian Business Register (ABR).
If your application is unsuccessful, you’ll get a refusal number. Within 14 days, you’ll receive a letter confirming that your application was refused, the reasons for refusal, and the options that are now available to you, including review.
How much does an ABN cost?
So, how much does an ABN cost? Fortunately, there’s no fee for applying for an ABN, so you don’t need to worry if your business’s cash flow isn’t up and running yet. However, if you’ve consulted a tax agent to complete the application for you, they may charge a service fee.
How long does it take to get an ABN?
You’ll find out about your ABN immediately after you complete your application, so you won’t need to wait for very long. However, the Australian Taxation Office (ATO) may need to review your application within 20 business days if they need more information or your identity cannot be confirmed.
What happens if my business details change?
Once you’ve got an ABN, it’s your responsibility to keep your details up to date. You should update your ABN details within 28 days if any of your key business details change, although it’s important to note that if you change your business structure (i.e. go from a sole trader to a partnership), you’ll need to apply for a new ABN.
We can help
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