Getting Your ABN in the 2024 Financial Year
One of the trends that we have identified in the first few months of the new financial year is significantly greater scrutiny from the ATO regarding ABN applications. Up to recently we would often be able to get an ABN for a prospective business client within 24 hours but on recent applications we have seen the ATO revert to the traditional service period of 28 days.
We have also seen clients refused an ABN because they answered the ATO’s questions incorrectly. One question the ATO asks during the application process is whether you have started your business yet. The answer to this question should always be yes.
Steps to commence business activities include:
- Advertising, setting up social media accounts, or a website for business. If you don’t know anyone in this industry, we can always refer you to people we know.
- Purchasing business cards or stationery for the business (once again we know reliable people).
- Obtaining Business Licenses or insurance to Operate (ask us about Phoenix Insurance).
- Leasing or purchasing premises, equipment, or stock for the business.
- Issuing quotes or bidding for work.
- Consulting with financial, business or tax advisors.
- Applying for finance (ask us about TAG Finance).
- Buying a Business (We know brokers as well).
If you have done any of these things you have commenced your business, so answer yes to the ATO’s question. If you have not done any of these things, you are probably not ready to apply for an ABN and start providing goods and services to customers.
When you apply for an ABN, there are other factors the ATO would like you to consider. Sometimes this involves a little bit of crystal ball viewing but often this is a smart thing to do.
- If you think your turnover will exceed $75000 in your first financial year you should register for GST up front and work into your routine how you will get quarterly BAS prepared and lodged. Having a budget that facilitates the payment of monies to the ATO is also a smart move.
- If you are going to need assistance running the business, you need to think about whether you will employ people or engage contractors. Putting on employees requires registration for PAYG Withholding and the contribution of superannuation. Often it is easier to sub-contract to others but the ATO are applying heavy scrutiny to this area as well. Whether you use employees or contractors you should consider your responsibilities in regard to worker’s compensation insurance.
If you need any assistance in starting your business MKG Partners are the ideal people to talk to. We have shepherded many people through this process previously and we have a network of strategic partners who can provide additional advice.