Why Having an ABN is Crucial for Your Trade Business

(Editor’s Note: The following article is general advice only. We highly recommend seeking independent legal advice depending on your needs or situation.)

If you’re a tradie looking to grow your business, having an Australian Business Number (ABN) is essential. An ABN not only makes you more credible in the eyes of potential clients but also ensures you’re legally recognised. 

It's a small but important step that could make a significant difference in winning jobs and running a successful trade business.

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What is an ABN?

An ABN serves as a unique 11-digit identifier that allows your business to operate more smoothly, both in dealings with clients and the government. It’s a versatile tool that brings several benefits, such as:

• Identifying Your Business: An ABN helps you clearly identify your business when invoicing or placing orders, establishing your professional credibility.
• Avoiding PAYG Tax Withholding: Without an ABN, clients may need to withhold part of your payment for tax purposes. Having one ensures you receive full payments.
• Claiming GST Credits: If you’re registered for GST, your ABN allows you to claim GST credits on your business purchases.
• Accessing Energy Grants: An ABN enables you to claim certain energy grants, helping you reduce business costs.
• Registering a Domain: With an ABN, you can register an Australian domain name for your business, making it easier to build an online presence.

Without an ABN, you may find it challenging to compete with other tradies, especially when clients prefer to hire businesses with official status. 

On our site, tradies with ABNs are prioritised, giving you an edge in securing more jobs.

Are You Entitled to an ABN?

While an ABN offers plenty of benefits for tradies, not everyone qualifies for one. To be eligible, you need to be starting or running a business (referred to as an enterprise) in Australia. 

This includes supplying services like plumbing, electrical work, or carpentry. If you’re registered under the Corporations Act or involved in activities connected to Australia's indirect tax zone, you also qualify.

It’s important to remember that applying for an ABN under false pretences, such as registering for GST or claiming refunds when you’re not entitled, can result in serious consequences, including an ABN entitlement review. When you apply, you’ll be asked to demonstrate that you’re running an enterprise.

What Qualifies as an Enterprise?

An enterprise is typically defined as a business activity. As a tradie, this means providing your trade services—whether it's carpentry, electrical work, or tiling—on a commercial scale. Some indicators that you're operating a business include:

• You’re conducting significant trade work for clients, such as providing repeat services, quoting for jobs, or invoicing customers.
• You have a clear plan to make a profit, not just treat it as a hobby.
• The business is organised and you’re keeping proper records, like tracking income, expenses, and client details.
• You have the relevant trade skills and qualifications to run your business professionally.

Even if you’re just starting out, you may still qualify for an ABN if you’ve begun taking steps to set up your trade business. 

This might include purchasing equipment, registering for necessary licences, or setting up a business profile online. Be ready to provide evidence if asked by authorities.

What Doesn’t Qualify for an ABN?

You can’t apply for an ABN for work that’s done as an employee. This includes roles like apprentices, trade assistants, or labourers. It’s illegal for an employer to require you to apply for an ABN just to do employee work.

What You’ll Need for Your ABN Application 

Before you begin the ABN application process, it’s essential to choose the right business structure for your trade business. 

You’ll need to decide if you’re operating as a sole trader, a partnership, a company, or another structure that suits your needs. Most tradies tend to operate as sole traders, but it’s important to pick the structure that works best for you.

To complete your ABN application, you’ll need:

• Tax File Number (TFN): This is your personal TFN. If you're in a partnership, you'll also need the TFNs of your business partners.
• Business Start Date: Be ready to provide the date you started (or will start) your business activities, such as accepting jobs or purchasing materials. This date must be within six months of your application.
• Legal Name of Your Business: This is your business name and will appear on official documents, invoices, and contracts.
• Contact Details: You’ll need to provide a physical address, postal address, phone number, and email address.
• Business Activity: You’ll need to identify your primary trade activity, such as construction, plumbing, or electrical services.

Most tradies won’t need details like a Professional Adviser Licence Number or Australian Company Number (ACN) unless they operate as a larger entity, so you can generally skip those parts if you're applying as a sole trader.

How to Get an ABN: A Simple Step-by-Step Guide

Getting an ABN is a straightforward process, and best of all, it’s free! Here’s a quick guide on how to apply:

1. Check Your Eligibility: To apply for an ABN, you must be running or starting a business in Australia. Tradies operating as sole traders, partnerships, or companies are all eligible.
2. Gather Necessary Information: Before applying, have your personal and business details ready, such as your Tax File Number (TFN), business name, and contact details.
3. Apply Online: Visit the Australian Business Register (ABR) website (abr.gov.au) to complete the online application form. The process is easy to follow, and the form will guide you step-by-step through the required fields.
4. Review and Submit: Double-check your details before submitting your application. Once you’ve submitted your ABN application, the Australian Taxation Office (ATO) will review and verify the information you’ve provided. If everything checks out, you can expect to receive your ABN within a few days if you applied online or over the phone. For paper applications, the process may take a few weeks.
5. Register for GST (if needed): If your business has a turnover of $75,000 or more, you’ll need to register for GST. This can be done during the ABN application process.

Be Wary of Scams 

There are a lot of scams out there claiming you need to pay money to get an ABN. The truth is, getting an ABN is completely free. 

Always go directly to the official Australian Business Register website to avoid any dodgy services that charge you for something that should cost nothing.

How an ABN Boosts Your Credibility

Having an ABN shows that you are a legitimate, registered business. When homeowners or companies search for tradies, they are more likely to trust someone who can provide an ABN because it suggests professionalism and accountability.

Here’s how an ABN can boost your trade business:

1. Professionalism: Clients expect tradies to operate professionally. An ABN gives them confidence that you’re a registered business, and they can trust you to do the job right.
2. Legal Compliance: Having an ABN means you’re complying with Australian business laws, which is critical when working on larger projects or commercial contracts.
3. Attracting Bigger Clients: Larger clients, such as corporations or government bodies, often require tradies to have an ABN before they’ll even consider offering a contract. Having one ensures you can bid for these bigger jobs.
4. Winning More Jobs: ServiceSeeking prioritises businesses with ABNs, which means having one will push your profile to the top when clients are searching for tradies. This helps increase your chances of securing more work.

Why ServiceSeeking Prioritises Businesses with ABNs

At ServiceSeeking, we know clients prefer to work with tradies who are registered and have a professional reputation. That’s why businesses with ABNs are prioritised on our platform. When you have an ABN, your profile will be boosted, making it easier for potential clients to find and hire you.

Being at the top of search results is critical when clients are browsing for tradies. Whether they’re looking for an electrician, plumber, or carpenter, they want someone who is reliable and legally operating—and having an ABN proves just that.

An ABN boosts your credibility, opens doors to new opportunities, and helps you get paid faster. Plus, platforms like ours prefer businesses with ABNs, making it even easier to land your next big job.

Join our platform, ServiceSeeking.com.au, today and showcase your ABN-registered business to a network of potential clients searching for reliable tradies!