Are you going to start a new business in Australia? If yes, then it’s important to get an Australian Business Number (ABN). Basically, ABN works as a unique identifier for your business, offers government interactions and can be used to keep an eye on your tax and benefits.
Overview of an Australian Business Number
An Australian Business Number is an 11-digit number, which is helpful in identifying your business and is given when you register your business. The first and foremost thing you need to do when you start a business is apply for ABN or Australian Business Number. When you register for ABN, it simply means that your business is legitimate and you can run your business in Australia. An Australian Business Number is issued by the Australian Business Register and run by the Australian Tax Office (ATO), which allows them to keep an eye on your business activities. Let’s navigate registration obligations for businesses through the essential steps together:
Step One: Obtain an Australian business number or an ABN
It’s like your business’s unique identity during registration. You’ll be asked specific questions to determine your entitlement to an ABN.
Step Two: Working as a business?
You’ll need an ABN if you’re providing products and services, sourcing customers and invoicing work. Remember, having a separate business bank account and insurance is crucial.
Step Three: Once you have your ABN, handle your business affairs online using my ID and RAM
ABN comes with responsibilities. You might need to register for GST and lodge activity statements. Don’t forget about PAYG withholding and meeting super obligations for your employees. And there are other regulatory obligations like payroll tax and operating licenses to consider.
Remember, keep your ABN details updated. Notify ATO if you add or cancel registrations or make changes to your business information and when it’s time to wrap things up, finalise all your business obligations, including reports, tax returns and activity statements, That’s it. You’re on your way to successfully managing your business obligations. For more information and to register, visit the Australian Business Register website. Remember staying on top of your business obligations, ensures a smooth journey for your entrepreneurial venture.
What will be Your Responsibilities Under an ABN?
Do you know what are your responsibilities under ABN? Don’t worry! Take a look at the following responsibilities that you must know:
Annual income tax return
If you have an Australian Business Number (ABN), you need to file an annual income tax return. It will apply to your business irrespective of whether it reports a loss or profit and whether it is below or above the tax-free threshold. You can also seek help from a tax return accountant to file a tax return on your behalf.
Update your ABN
As a business owner, it will be your duty to keep your ABN information up to date. You must do this within 28 days of learning about any changes.
- A lifetime Australian Business Number: This means that once you register for an ABN, you are entitled to use it as long as your business is operating.
- Cancelling your ABN – You can cancel your ABN if your business is no longer active, but you must first file any unfiled income reports.
- GST – Even if your income is below the $75,000 GST level, you still require an ABN.
Do Sole Traders Need an Australian Business Number (ABN) ?
As a sole trader, you are not legally required to register for an ABN, unlike a partnership, corporation, or trust that runs a business.
An ABN may seem like a superfluous formality if your business is still in the hobby phase. After all, if your yearly turnover is under $75,000, you are not required to get an ABN. However, this does not exclude you from requesting an ABN as a sole trader right away. If you operate a business in Australia or make a supply related to Australia as a sole trader, you are eligible for an ABN. While you are not required to get it as a sole trader, various advantages prove valuable as your income and business complexity increase.
Conclusion
The blog covers everything related to Australian Business Number (ABN) and whether you need an ABN if you are a sole trader. To help get yourself registered for ABN, you can seek help from Reliable Melbourne Accountants.