An Australian Business Number, also called an ABN, identifies your business. ABN is required for tax and other business reasons. In this blog, we’ll discuss what an ABN is, what it is used for, and how long it takes to get an ABN.
What is an ABN?
An Australian Business Number (ABN) is a unique 11-digit number used to identify your business to the government, the public, and other businesses. ABN doesn’t replace your tax file number. Your ABN is unique and avoids confusion for clients and businesses alike. In addition to this, ABN is issued to all types of businesses, regardless of their size or structure.
What is an ABN used for?
Australian Business Number is used to:
- claim energy grant credits
- claim goods and services tax (GST) credits
- avoid Pay As You Go tax on payments you receive
- verify your business to others when invoicing and ordering
- get an Australian (.au) domain name.
What is an ACN vs ABN?
- Australian Business Number (ABN): An ABN is an 11-digit number that every business in Australia must obtain. It identifies the business and is used in dealings with the Australian Taxation Office (ATO) and commercial transactions. As business names can be quite similar, the ABN of a company can help people ensure that they are working with the correct entity.
- Australian Company Number (ACN): An ACN is a 9-digit number that only companies obtain. The ATO is responsible for issuing ABNs, while ACNs are issued by the Australian Securities and Investments Commission (ASIC). ACN is quite similar to ABN because it is also used to identify your company.
How long does it take to get an ABN?
If you provide all the information required, you will receive your ABN after completing your ABN application. You’ll get:
- your ABN, if your registration was accurate and successful
- a refusal number if your registration is not successful. You may receive a letter within 14 days with a reason
- a reference number if your application requires further review.
Review could take up to 20 business days and the ATO may get in touch with you for more information.
Important facts about Australian Business Number
To help you understand essential facts about Australian Business Number, we have gathered a few facts written below:
- ABNs and the tax-free threshold: Most people with an Australian Business Number must file an annual income tax return. This is irrespective of whether the business is reporting loss or profit and below or above the tax-free threshold. For more information about tax matters, you can consult a tax return accountant.
- ABN entitlement: Not everyone must have an ABN- you must be running a business. You are also responsible for your income tax, GST and superannuation.
- Updating your ABN: It is your responsibility to keep your ABN details updated. You should update your details within 28 days as soon as possible. Updating the details of your ABN will ensure:
- The right people have certain permissions to act on behalf of a business.
- Government authorities will have the right and accurate information.
- You are prepared for new government services as they become available.
- ABNs for life: Your Australian Business Number is for life. You are only liable to an ABN while you are operating a business. To prove you are still running a business, you need to keep your tax return and activity statement lodgment updated. To maintain records of everything, you can choose bookkeeping in Melbourne.
- Cancelling ABNs: Before cancelling your ABN, ensure to lodge any outstanding income tax returns and activity statements, and meet payment obligations, including STP.
Conclusion
Now, you are aware of an ABN and its significance. If you are running a business, make sure to apply for an Australian Business Number for a unique identity. For more information on tax matters related to ABN, you can reach out to Reliable Melbourne Accountants.