Tips

Do I really need an ABN for my Business

The answer is Yes.  There might be a rare exemption here and there, but if you are conducting business in Australia, you will need an ABN.   ABN requirements are applicable to all business structures; Sole Trader, Partnership, Trust, Company and Superannuation Funds.

ABN is an acronym for Australian Business Number.  It's the Australian Government's way of keeping tabs on you and linking many business and tax obligations under one umbrella number.  If you're a fan of Big Brother, then this empowers the Government to do a little snooping on you.

An ABN is a unique 11-digit number that identifies your business to the government and community.

Does my ABN registration include GST?

No.  When you register for an ABN you do not get an automatic registration for GST.  In fact they are not related and require additional registration.  The ABN is the big government approach to keeping tabs on you and the GST is the tax collection system through the Australian Taxation Office.  

It's common practice to apply for GST registration with an ABN registration.  GST registration only become mandatory when your annual turnover exceeds $75000.  Below that number and you can quite comfortably conduct business without being GST registered and charging GST on your sales.  You also cannot claim GST credits for purchases you have paid.

So if you are indeed a one man (or women) operation who's annual turnover is likely to be under $75,000 then do the sums and work out whether GST registration is beneficial or not.  Also keep in mind that as a GST registered person you have additional administration obligations to the Tax Office every quarter.  There is a cost to that even if you undertake the paperwork yourself. 

You can use an ABN to:

• identify your business to others when ordering and invoicing
• avoid pay as you go (PAYG) tax on payments you get
• claim goods and services tax (GST) credits
• claim energy grants credits
• get an Australian domain name.

You can apply for an ABN through the Business Registration Service for free.

Not everyone needs an ABN, to get one you need to be running a business or other enterprise. Find out if you’re entitled to an ABN.