We want to make sure all of our businesses are as genuine and as committed to quality customer service as we are. So, we’re making it compulsory for all new businesses to supply us with a valid Australian Business Number (ABN). With the introduction of this new function, we thought we’d give you a quick run-down (or refresh your memory) about the ins and outs of ABNs and what it might mean for you.
True: It is completely free!
False: It means you have to pay GST. Many freelancers who earn under the $75,000 threshold assume that an ABN will force them into paying extra tax. This just isn’t true; in fact there are tax claim benefits to having an ABN. An ABN allows your business to claim back GST credits, claim fuel tax credits you may be eligible for, offer fringe benefits to employees and register to use a PAYG (pay as you go) withholding system.
True: If your business doesn’t quote an ABN on your invoices, other businesses are legally bound to withhold tax at a rate of 46.5% from any payments they make to you. Although you can claim it back at the end of the year, everybody likes steady cash flow!
False: It is a headache to get one. You can apply online via the Australian Business Registrar website. If you have all your information ready to go (i.e. your tax file number and business details), your ABN should be allocated immediately!
True: An ABN will make it easier for your business to deal with government agencies and departments as well as other businesses.
False: You can register a website domain name with a ‘.au’ extension without an ABN. You must have an ABN to do so.
True: Having an ABN will allow potential customers to see that you’re authentic.
