What’s an ABN?

An Australian Business Number is an 11-digit identifier for your business. It helps identify your business with the government, suppliers, and customers. It’s like your business’s ID number – and it’s essential if you want to operate officially in Australia.

You need it on your invoices, to register your business name, claim tax deductions for your business, and register for GST if you’re earning more than $75,000 per annum. You may also need to supply your ABN to avoid tax withholding on your payments.

An ABN is needed by all businesses – sole traders, companies, trusts and partnerships.

If you are running a business, you need to have an ABN.

You will also need to supply your ABN if you register an Australian domain, such as a .com.au domain, or even a .au domain.

What Does an ABN Do?

It’s the way the Australian government ensures you are compliant in any business requirements and tracks your business activities, and can be used to prove you are a legit business when pursuing wholesale purchases.

You need it on your invoices to show that you are a real business, and it affects any taxation that could be applied to your payments. You need it to apply for business-related tax deductions. If you don’t have an ABN, you don’t have a business – you just have a hobby. If you’re running it as a business though, the ATO will find out!

How Do you Apply For an ABN?

Getting an ABN is free and can be done online.

Click here to start the ABN Application process.

You will need to have some idea of what sort of business structure you intend to use before you start. If you change your company structure later, from a sole trader to a company or trust, you will be creating a completely new legal entity. So you will get a new ABN, and will also need to apply for a new Tax File Number too.

What Do You Do If You Cease Trading?

Hopefully you never need to know this, but businesses can cease trading for any number of reasons.

To finish up your business, you need to cancel your ABN. You can do this or you can ask your accountant to do it for you. You will still need to report all activities until the moment of cancellation.

GST Registration will also need to be cancelled if you cease trading or reduce operations to an income level under $75,000 and don’t think that you will increase again. This can be completed at the same time as the ABN cancellation, or you can do it separately. Make sure your bills and debts are paid out and completed, your accounting is tidy, and there’s no payments or income left outstanding if possible. You will need to keep records for five years including receipts, BAS and tax lodgments, invoices, and any payroll records.

However...

If you’re worried about your business, seek help! We have trained experts that can help you work through your cashflow, your reports and your books to help you move into more profit and less stress. Your accountant may be able to help, and here at Northwest Accounting we also offer mentoring and coaching services for CEOs in business.

If your business isn’t meeting your needs, let’s find out why together. Give us a call on 08 9185 9400.