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Can I start business without ABN?

Discussion in 'Starting a business' started by fanix, Feb 3, 2010.

  1. fanix

    fanix Member

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    Quick Question:

    Am I allowed to start my online store without having an ABN, if my turnover is below $75,000?

    Business name already registered...
    Last edited: Feb 3, 2010
  2. vxd

    vxd Member

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    Turn over $75000 is when you are required to apply for GST I don't think it has anything to do with ABN.


    I think it goes something like this: The person whom is paying for your services will be able to withhold 40 something % because you do not have an ABN.

    You will just be taxed at the highest threshold.


    Just Call up ATO they will answer all your questions.
  3. fanix

    fanix Member

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    That's a bit hard seeing as I'm in South Africa atm.
  4. JamesMillar

    JamesMillar Well-Known Member

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    Yes you can start your business without an ABN. Its only compulsory if you hit the $75k mark and are then required to register for GST.

    The only issue with not registering is that the payer may be required to withhold PAYG for non disclosure of ABN. Thats provided the payer is a business (so for B2B transactions). If the payer is a non busness entity then the withholding does not apply.

    Even if the payer is a business, if the supply is less than $75 they are not required to withhold for non disclosure of ABN. So depending on what you are selling, if they are low value items or you are supplying to end users only (non business payers) withholding may not be an issue.

    If you are running a non resident enterprise with a permanent establisment in Australia then thats a different matter again.

    Edit..Speak to your / an accountant about your specific circumstances as this is general advice only.
    Last edited: Feb 3, 2010
  5. fanix

    fanix Member

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    Thanks for the great feedback!
  6. Accountix

    Accountix Member

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    As well as what everybody has already mentioned, you also have to concider if you are carrying on a business or a hobby. It does sound like you are going to carry on a business for which it would be adviseable to get an ABN

    Shane Holbeck - Accountix
    www.accountix.com.au
  7. beancounter

    beancounter Member

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    Disclaimer [we are not tax agents / accountants / lawyers so cannot give advise in such matters]

    See ATO website - extract below
    Not everyone is entitled to an Australian business number (ABN).

    Companies registered under the Corporations Law and business entities carrying on an enterprise in Australia are entitled to an ABN.

    Employees and hobbyists are not entitled to an ABN as they are not carrying on an enterprise.

    Self-funded retirees do not need an ABN. They continue to use their tax file number when reporting their annual income to the Tax Office.
    Is the ABN compulsory?

    Applying for an ABN is not compulsory. However, if you are required to register for GST, you will need to apply for an ABN as well.

    All businesses with a GST turnover of $75, 000 or more must register for GST and will need an ABN to do this. This can be done on the same form. Organisations with a lower annual turnover may choose to register.

    Why might my enterprise need an ABN?

    You need an ABN and GST registration in order to claim GST credits for any GST you have paid for goods and/or services you have used in your business.

    If you are supplying goods or services, you will need to be able to quote an ABN so that others businesses do not withhold tax at the top marginal rate when they pay you.

    How does the ABN affect relations between businesses?

    Businesses registered for GST are required to issue tax invoices that quote their ABN. Under pay as you go taxation, businesses receiving an invoice are required to withhold tax from their payments for goods and services if an ABN is not quoted.
  8. Tinkie

    Tinkie New Member

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    Hi FaNIX

    I am from South Africa too.
    Starting a business here may seem confusing at first, but it's only when you here that you really understand how it all fits together, the TFN, ABN, Business name and/or Company Name, Trademark, Privacy Laws, etc...

    I received alot of help from the using the www.business.gov.au website

    Tinkie!
  9. Sheila

    Sheila Member

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    One of the things I have personally found is that even though it is not mandatory to have the ABN a lot of suppliers are reluctant to do business with you if you don't have one.


    Be aware too. you only get one ABN under your name , so if you run one business with that ABN and want to start up another business you still use the same ABN. I spent weeks waitiing for my "new"ABN only to be told this by the ATO when I rang to find out how much longer I had to wait. Apparently the application for my second ABN went into the "ether" somewhere.

    I have one ABN in my own name for the businesses I have myself and I have another ABN (in both names) with my husband.

    I am a newbie to a lot of all this so you may need to double check this with ATO.

    cheers Sheila
  10. mitchcrowle

    mitchcrowle New Member

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    I back Sheila with this - I found that a few prospective clients were initially hesitant to work with me and no ABN was the main reason, since October last year when I registered a business name and gained an ABN, it has been smooth sailing with clients.

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