Getting an ABN: Pros and Cons?

[thegaminggamer]

What are the benefits and costs of getting an ABN?

Pros

• GST Seller Fee Exemption
• Australia Post Parcel Discounts

Cons

• ?

[ozstockman]

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@thegaminggamer wrote:

What are the benefits and costs of getting an ABN?

Pros

• GST Seller Fee Exemption
• Australia Post Parcel Discounts

Cons

• ?

---

you will get GST exemption only if you are registered for collecting GST with ATO but then you will be collecting and paying GST to ATO

The good thing though you can claim GST paid on services and goods for your business against GST you have collected from your sales.

Now if you clients are businesses  and you will increase your prices to accommodate GST in them these clients would not mind, If you sell to individuals the fact that you are collecting GST does not matter to them(they cannot claim it back) so they won't be happy if add GST to your current prices.

That all probably goes under Cons.

I do not know current situation but registering  for ABN is free, It takes  a few minutes on ATO website to register and then you need to wait till paperwork comes through mail. it is all based on experience 10 years and 3 years ago. Something may be changed so you need to check with ATO.

And please confirm with AusPost about discounts. You can check my post at https://community.ebay.com.au/t5/Selling/Anyone-here-qualifies-for-Australia-Post-parcel-discounts/m... to see why you need to confirm it.

P.S. If you want to get ABN and register for GST just to get an GST exception for eBay fees I highly doubt you will win anything.  Accounting is more complicated with GST, you will be paying GST back to ATO so doing all that just to save 10% on eBay fees simply not worth it.

[sacramentalstoles]

For a ABN - no cost see the link below

https://abr.gov.au/For-Business,-Super-funds---Charities/Applying-for-an-ABN/

I have a sole trader ABN which is quoted across various selling ID's for tax income purposes.

No you don't get GST Seller Fee Exemption unless you're registered for GST
You also don't get an automatic Australia Post Parcel Discount - you still have to send 250 parcels or over pa.

Aus Post chopped off myPostBusiness discounts last month...
They had a 'qualifying' period of 8 weeks which determined your eligibility for each discount tier.
It was unfortunate that I was away for 4 of those weeks - plus it's also not my 'busy' time of year. *sigh*

[digital*ghost]

As already mentioned, you can only get the GST exemption if you are collecting and paying GST on your sales, so it's not worth it on that count (that is, 10% of your revenue will need to be paid to the ATO, including what you get for postage, while you only save 10% of your FVF up front). I wouldn't do it unless I had no choice (i.e. my turnover is $75k+ per year)

Tax-wise, it's not especially complicated if you're a sole trader. When I do my tax returns, I just input revenue, and all costs associated with running the business for that financial year, and then they work out how much tax I have to pay on the nett profit. 

The only real pro (for the average trader) is access to businesses and services you wouldn't have otherwise (aside from the My Post discount, some wholesalers won't sell to the general public, so you have to have an ABN to purchase from them).

[melbourneclearance]

Re. GST exemption on FVF

I didn't even bother applying for that. You can claim that back from ATO anyway. Hopefully I keep collecting more GST than I pay!

Financial-wise getting an ABN doesn't have any pro. Although with an ABN you can register a business name and secure that precious btand name which has been feeding your 20 kids, 2 grandmas, and 50 cousins. An ABN also gets you into trade fairs and wholesalers.

[thegaminggamer]

Seems like getting an ABN for eBay purposes doesn't seem to have much value so I won't. I'll go ahead and get it for Australia Post though.

[lyndal1838]

You don't get an ABN for use with one entity....if you get an ABN you use it for ebay and Australia Post and any wholesalers you may deal with.

Do NOT under any circumstances register for GST at this stage.

[thegaminggamer]

Thanks for the warning. I'll do my best to avoid registering for GST. I'm just a small hobby seller that doesn't need any more trouble and who would appreciate any discounts Australia Post can give me. (I'm nowhere near the $75,000 limit or whatever the figure is for compulsory registeration for GST)

[melbourneclearance]

I'm not aware of any Australia Post discount for just having an ABN.

They have a Business 250 discount. For that you have to have orinted 250 parcel labels through their website within a calendar year, which strangely prices all the labels at higher prices than doing it over the counter at a post office. In the end, there is no real discount with this method.

[porcelain_dolls_by_me]

There are no benefits in registering for GST - only extra work lodging BAS returns and the associated record keeping.

Avoid it as long as possible.