ABN, Domain Names, Licensing and GST

Australian Business Number (ABN) ABN was introduced in Australia in 2000 as a part of the New Tax System. Intended to replace all of the other business numbers but for the moment its main purpose is to allow businesses to take part in the GST tax system. All business entities really should have an ABN. The exception to the rule is if your business is only a hobby. ABN must be included on all invoices and receipts

Australian Business Number (ABN) By law, a business that receives an invoice without an ABN included is required to pay only 51% The other 49% goes to the ATO. Each invoice or receipt issued by any business creates a paper trail by which the ATO can track business transactions.

Who needs an ABN? Sole traders can use 1 ABN for all of their business activities. Partnerships should have an ABN for all of the partners working together. It is possible to have a partnership ABN for your work with a group, and a separate ABN for your work as a sole trader. Company is a separate entity from its directors, it therefore has its own ABN Employees of any kind are not entitled to an ABN.

Tax invoices and ABNs Must include the words ‘tax invoice’ 2. Must contain your business name and ABN 3. Must contain the name of the person to whom the invoice is addressed 4. Must include the date the invoice was issued 5. Include a brief description of the goods and quantity of goods supplied 6. Must show the amount payable and the GST payable separately, and the total including GST 7. Must contain your business address

Applying for an ABN ATO website at www.ato.gov.au. It costs nothing, simple process that will take about half an hour to complete. You will need info on all people who are applying for the ABN: full names, addresses and tax file numbers. The ATO will process your application and, if you are eligible, will send you notification of your ABN. This can take anything from a day to a few weeks, Once your ABN is registered you do not need to apply to renew it. Place your ABN on your letterhead, and on all invoices and receipts.

Registering a domain name Ownership and protection of a domain name is just as important as protecting your business name It is well worth considering securing your domain name at an early stage of your business, Check out Crazy Domains Check out Go Daddy

Some notes on domain names Is the name easy to remember? Does it indicate what your business does? Is it similar to (or the same as) business name? Is it too similar to one used by your competitors? (You don’t want to drive traffic to their site) Is it a logical fit with your business?

Registering a domain name A .com domain suggests that a business trades on an international level - .au more local

Costs of registering a business name ICANN can stop someone from using a .com, .net or .org domain name when: Name is identical or confusingly similar to a tm Registrant has no rights or legitimate interest in the domain name The domain name has been registered and is being used in bad faith.

Registering a domain name There are a number of domain name registration providers available; Melbourne IT (for example) Free searches of available domain names and usually offer all the alternatives if your preferred option is already taken. You don’t need to have a website to put up straightaway,you can just hang onto the name and address until you need it Costs $50 to $100 for the 1st year, and subsequent years

Licences and permits Licences grant a business the right to carry out a particular activity. They are generally aimed at professional or skilled service-providers (e.g. lawyers or builders) Aim is to protect consumers from unscrupulous and unqualified business operators within particular industries. Music business operators have a tendency to ignore licensing requirements

Business Licence Information Service (BLIS) BLIS (www.bli.net.au) is a free online service that provides details of many licences required in all states of Australia. Most state websites will then generate a report outlining the types of licence required and how to acquire them. Approvals and permits are generally required to operate a business in a specific location. You need to seek approval from local councils

GST Requires businesses to add 10% of the normal sales price of goods or services to their invoices and fees. Consumers pay it at the time they pay for goods or services. GST-registered business, fill out a ‘Business Activity Statement’ (BAS) every 3 months and tell the ATO how much GST they have collected through sales, and how much you have paid out in expenses. If a business has paid out more GST in expenses than it has collected in GST, then the ATO will reimburse the business.

Registering for GST You must register for GST if: You are an entity carrying on an enterprise — (not a hobby) Annual turnover is at or above the registration turnover threshold of $75,000. You may choose to register if your turnover is below the $75,000 threshold.

What are the benefits of GST registration? By registering for GST you are entitled to claim input tax credits for the GST included in the price paid for things for use in your business. If you are not registered you cannot claim input tax credits, so your business costs could be higher than those of your competitors.