Conducting business in Australia is impossible without an Australian Business Number (ABN). This identifying number of 11 digits will appear on every invoice you create and will be how the Australian Taxation Office (ATO) keeps track of how much you owe in tax every financial year. It’s important that the process of acquiring an ABN is done correctly or it could lead to issues further down the line.
In all honesty, applying for an ABN is as simple as filling out a form. However, knowing what makes you eligible is what makes the real difference. Before opening the application form on the Australian Business Register (ABR) page you’ll be asked to tick boxes ensuring you understand the eligibility criteria.
One must fulfill all or most of the following prerequisites before even being considered:
- Clients are sourced by the business owner
- Work can be delegated to others without needing to seek permission from an employer (this would make one an employee meaning they’d need to use a Tax File Number instead)
- Invoices and rates of pay are set/negotiated by the business owner
- The bank account where money for goods or services goes is separate from one’s personal bank account
- One is responsible for their own personal liability insurance, worker’s compensation, income protection and/or professional indemnity
- The business is in (more or less) continuous use.
It is important that you consider these criteria seriously before applying because some businesses and sole traders are called at random with questions about their work and can be asked for proof. If any of the above are missing, the best case scenario is that your ABN is canceled. The worst case can result in serious fines for lying to the government. This is the last thing anybody needs when they’re carrying on a business thinking all is well. For an example from the ABR themselves, check out this video at the bottom of the page.
As for time, an ABN could take up to 28 days to be approved but keep in mind it could take longer if you don’t have a prior form of identification like a Tax File Number (TFN). Lastly, applying for an ABN is completely cost-free unless one is going through an agent to save time or effort. Application is quite easy though, so applying on your own shouldn’t be a painstaking process. Once approved, you’ll receive online notification immediately. In addition, you can use the same ABN for any number of businesses so long as they operate under the same business structure. As an example of where this does not work, one cannot operate a for-profit store and a non-profit charity under the same ABN.
Take a good look through the eligibility criteria, ask yourself if you meet them, then apply for your very own ABN. Good luck!