What is a Sole Trader ABN
When you become a sole trader, you need to register for an Australian Business Number (ABN). This is a unique 11-digit number that identifies your business to the government and other businesses.
Your ABN allows you to:
- claim GST credits
- claim fuel tax credits
- lodging BASs and activity statements
- pay excise duty on alcohol and tobacco products
You can apply for an ABN online through the Australian Business Register website. You will need to provide your contact details, business structure and type of business activity. Once you have been issued with an ABN, you can start doing business.
It is important to note that you are not required to have an ABN to operate as a sole trader. However, without one you will not be able to claim GST credits or fuel tax credits, and you may find it difficult to do business with other businesses who require an ABN for payment. You will also need an ABN to register for PAYG withholding.
If you are thinking of starting a business, or are already operating as a sole trader, we highly recommend that you apply for an ABN. It is simple and easy to do, and will give you the peace of mind of knowing that you are compliant with your tax obligations.
To apply for an ABN, you will need to have a Australian Business Number (ABN). You can apply for an ABN online through the Australian Business Register website.
Once you have been allocated an ABN, you will need to register for GST if your business has a turnover of more than $75,000 per year. You can do this online through the ATO website.
If you are registered for GST, you will also need to file periodic returns and make payments to the ATO. Returns are typically filed quarterly, but can be monthly if your turnover is high enough. Payments are made monthly or quarterly depending on your GST registration status.
As a sole trader, you are personally liable for all debts and obligations incurred by your business. This includes any money owed to suppliers, employees, the ATO or other government agencies.
You should also be aware that as a sole trader, you are not entitled to certain employee benefits such as sick leave, annual leave or long service leave. You will also not be covered by workers' compensation insurance in the event of an accident at work.
It is important to understand your rights and responsibilities as a sole trader before starting your business. You can get more information from the ATO website or from a qualified accountant or solicitor.
