Do I need an ABN for my sole trader business?

Like many people, you may be just starting your small business or side hustle and are unsure on whether or not you should obtain an ABN? Perhaps it’s a life-long hobby that has suddenly started generating revenue for you and you now need to decide if you need an ABN?

You are only entitled to an ABN if your activities have the features of a small business. These can include;-

  • Making commercial sales.
  • Having the intention to make a profit.
  • Advertising your product or services to the public.
  • Your activities are repeated and systematic.
  • The activity is similar to other businesses in the same industry.
  • You have relevant knowledge or skills in your field.

By registering for an ABN you will be able to;-

  • Confirm your business identity to your suppliers and customers
  • Obtain an Australian domain name
  • Allows you to open a business bank account
  • Claim energy grant credits
  • Register to claim GST credits
  • Stops customers from withholding 47% PAYG Withholding taxes

By the way, if you are engaged in an activity that is not a business, but you are dealing with other businesses on an infrequent basis, the ATO has a form called a “Statement by a supplier” that you can hand out with your invoice. This will prevent businesses from taking 47% tax out of your payments.

If you have any questions about the process of registering for an ABN, contact us via email or our social channels. We would be delighted to help guide you down the right path when it comes to setting up your small business.

We are small business specialists based in Mount Annan in the heart of the growing Macarthur region of South-West Sydney. With over twenty-five years’ experience, we take great delight in seeing small businesses take off and succeed with our guidance.

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