How To Get/Apply An ABN In Australia | upcover Blog
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Are you looking to start a business and you’ve heard that you need an ABN?
Or perhaps you want to work as a contractor and have been asked by a prospective client what your ABN is?
Starting a new business and working for yourself for the first time is exciting. But it can also be daunting, especially when it comes to the endless admin tasks you have to complete in order to set up a legitimate entity.
And, of course, knowing where to start can be overwhelming at first.
So, to help you navigate the admin side of setting up a new business, we’ve put together this quick guide on how to get an ABN as a business owner, freelancer or contractor.
What Is An ABN And Why Do You Need An ABN?
ABN stands for Australian business number and refers to an 11-digit number that’s unique to a business and allows the government, third-party organisations and the community to identify a company.
Australian companies typically use their ABN in the following instances:
- Invoicing clients
- Avoid paying ‘’pay as you go’’ tax on payments: if you don’t provide your ABN to a client and the amount of the transaction is in excess of $75, your client can withhold the top rate tax from the payment and pay it to the ATO instead. You’ll find more information on this on the ATO’s website.
- Claim GST (goods and services tax) credits
- Claim fuel tax and energy grants credits
- Apply for an Australian domain name
Anyone starting a business activity, including renting out a property or operating a charity, is entitled to apply for a free ABN.
While businesses earning less than $75,000 GST turnover a year aren’t obliged to apply for an ABN, it is compulsory for any business with a GST turnover of $75,000 or more.
Things To Check Before You Apply For An ABN
So, you want to start a business, and you’ve heard you need an ABN. But before you look into the free abn setup process, there are certain things you need to define.
Here are some important things you need to check before you apply for an ABN.
- What Is Your Business Structure?
There are four main business structures in Australia; sole trader, partnership, company and trust. And the process is a little different for each of them. If you want to operate as a sole trader or partnership, you can immediately apply for an ABN. However, if you operate as a company, you’ll first need to apply for an ACN (Australian Company Number) with the Australian Securities and Investments Commission (ASIC) before applying for your ABN.
- What’s Your Business Name And Main Activity?
For your application to be successful, you’ll need to provide the name of your business, its location and describe the main activity that will be carried out. Now, if you’re just starting and you haven’t got a definite name for your business yet, there is no need to panic. You can use your own name instead. If you’re planning to carry out several activities, use the one that will be the main source of income when applying. Also, if you plan on having more than one physical location, you’ll have to provide addresses and contact details for each one of them.
Having this information handy when applying will make the process easier and increase the chances of your application being successful.
- What’s Your Tax File Number?
A Tax File Number (or TFN) is a 9-digit personal reference number issued by the ATO to a legal paying entity. The great news is that applying for a TFN is also free and can be easily done on the ATO’s website!
Keep in mind that you’ll need to provide this number when applying for an ABN, so make sure you have it beforehand.
You’ll find more information on what you need for your ABN application on the ABR website.
How To Get An ABN?
The best way to get an ABN is to apply through the Australian Government’s Business Registration Service.
Note that this service is free of charge, which is welcome news as starting a new business can be costly!
And to make the process easier, you can also register for a business name and taxes through the same website.
Here’s how to get an ABN for free step by step:
- Jump onto the Australian Business Register
- Click on ‘’apply for an ABN.’’
- Tick the box ‘’I agree to provide true and correct information in this application and have read and understand the conditions above.’’
- Click next.
- In the following page, select the type of entity you want to operate under and fill in the subsequent fields. The questions will help determine whether you’re entitled to an ABN. Note that the type of activity you’re planning to carry out is ‘’in the form of a business’’. Once you’re done, click next.
- The following screen will prompt questions about previously held ABNs and your TFN. Click next once you’ve filled out all the fields. here’s more information on having multiple business numbers. Also, the answer to ‘’’ is the applicant an Australian resident for tax purposes?’’ should be yes.
- On the next page, enter the relevant information, including your contact details and the details of any of your associates and click next.
- The following page is about indicating when you need the ABN by and sharing your main business activity. Click next once you’ve filled out all the fields.
- On the next page, you’ll be asked to enter the main business's physical location and business contact details.
- The last page is about the reason for your application. Yours is ‘’a new business in Australia’’.
- The final page is the declaration page.
- If you’ve provided enough information, you’ll receive your ABN immediately.
What Happens After You Apply For An Australian Business Number?
Here are the two scenarios after applying for an ABN:
If your application is successful, you'll immediately receive your 11-digit number. Although a letter will also be sent, confirming your ABN number within 14 days of applying for it, we’d recommend saving or printing your confirmation and storing it somewhere safe. Your details will be added to the Australian Business Register, and you will be able to find your ABN on the ABN lookup tool.
You might receive a reference number which could mean your application is incomplete, and the ATO needs to review it further. In that case, your application should be reviewed within 20 days, and someone should contact you regarding the missing information.
Additional tip: for your application to be processed as quickly as possible, make sure to provide all of the necessary documents so your identity can be immediately verified.
As soon as you’ve received your ABN, you’ll be able to register for tax and apply for a business name.
In the instance your application has been refused, you’ll receive a refusal number along with a letter stating the reasons your application was unsuccessful, as well as the options available to you. You should receive the letter within 14 days. There are a number of reasons that can explain why your application was successful, from entitlement criteria to missing information. So, make sure to familiarise yourself with the entitlement criteria and documents you need to provide, as stated above.
What Other Registrations Do I Need As An Australian Business Owner?
As mentioned before, you’ll also need to register for GST and PAYG withholding and apply for a business name. And the good thing about applying for an ABN is that if you change your business name, you can easily apply for a new name using the same ABN number.
Also, don’t forget about business insurance, as it could save you thousands in potential compensation and legal fees.
To find the best insurance policy for your gardening business, check out our instant quote generator, where you can get an estimate on market-leading insurance in seconds! Simply enter your occupation and expected revenue to get started.