It is your responsibility when starting a new business, to ensure that you familiarise yourself with all the registrations that your business requires and then complete them. These registrations include:
Australian Company Number (“ACN”)
If you plan to run your business through a company, you need to register your company with the Australian Securities and Investments Commission (“ASIC”). In order to register your company with ASIC, please look at the following checklist from ASIC on starting a company – including registration.
Australian Business Number (“ABN”)
An ABN is a unique 11-digit number that identifies your business to all levels of government. You are entitled to register for an ABN even if you are doing business as an individual (sole trader) as you need an ABN in order to:
- Register for Goods and Services Tax (GST);
- Be identified as a business and therefore NOT have Pay As You Go (PAYG) tax deducted from all payments you receive.
If you plan to cease operations, you need to cancel your ABN – you do this in the same place as you register your ABN – using the Australian Business Register.
Tax File Number (“TFN”)
This is your personal reference number in the Australian Tax and Superannuation systems. All structures EXCEPT for a sole trader (when doing business as an individual, you use your personal TFN), should register for a TFN and this number stays with you/your business for life. If you DON’T register for a TFN, you will be taxed at the top rate for all payments made to you. To register for a TFN – look at the following page on the Australian Tax Office website.
Goods and Services Tax (“GST”)
In order to register for GST, you need an ABN. Once you register for GST, you are obliged to charge GST on eligible sales and you may claim GST on all eligible payments. Registration may be voluntary, but is mandatory if:
- Your business has a ‘GST Turnover’ (i.e. gross income excluding GST) of $75,000 per year or more;
- Your ‘non-profit’ organisation has a GST Turnover of $150,000 per year or more;
- You provide taxi or limousine services for a fare – regardless of your GST Turnover per year; or
- You want to claim ‘Fuel Credits’ (i.e. claim the fuel tax that’s included in the price of fuel)
You can register for GST as follows:
- Online via the ‘Business Portal’;
- By phone on 13 28 66; or
- Through a registered tax agent.
Pay As You Go Witholding (“PAYG”)
If you plan to employ staff, you have an obligation to assist them to meet their end-of-year tax liability by collecting PAYG from amounts that you pay to:
- Your employees;
- Other workers (e.g. contractors) that you have voluntary agreements with; and
- Businesses that don’t quote their Australian Business Number (ABN).
It is important that you register for PAYG before withholding an amount from any payments and that should you cease to be an employer, you cancel your PAYG withholding registration.
Fringe Benefits Tax (“FBT”)
Where an employer provides benefits to an employee – including the employee’s family or other associates, that employee might be taxed on the ‘taxable value of the fringe benefits’ provided. To read more about FBT plus how to register, please visit the Australian Tax Office website.
If you would like to read more topics related to starting your small business in Australia, or how our new mobile accounting app might assist you, please refer to our website at www.liadaccounting.com.au
Disclaimer: Any advice provided on this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consult your accountant or professional advisor.