ABN number?

sonic.trip

I got chatting to a person in the pub on saturday and they were telling me they went to oz for a few years back in 2002. anyway they were telling me to apply for an ABN number when I get over there because you don't pay as much tax than you would with a WHV and you can also claim some of your tax back when you are leaving.

anyway, does anyone know is this is true or not, and does anyone have an ABN on here that is in oz the the minute?

I have been researching it but it just gives an explanation of what it is, no FAQ's etc:

An ABN (Australian Business Number) is an 11 digit identifier that makes it easier for businesses and all levels of government to interact. You do not have to have an ABN, but having one will avoid having amounts withheld from payments to you; and make it easier to register for GST and other business tax registrations such as PAYG withholding. You can apply for an ABN (Australian Business Number) or access and update your ABN details online.

Feelgood

Think of an ABN number as along the same lines of an Irish Vat number, while its true there are certain tax benefits using an ABN number you wouldn't be able to get an ABN unless you are registering a company and starting your own business in Australia.

Everyone here gets a Tax File Number or TFN which is the same as an RSI in Ireland. As an individual you use number this to pay tax and yes you can claim a % of that tax back using your TFN.

Mellor

Feelgood wrote: »

Think of an ABN number as along the same lines of an Irish Vat number, while its true there are certain tax benefits using an ABN number you wouldn't be able to get an ABN unless you are registering a company and starting your own business in Australia.

you don't need to register a business to get an ABN, anyone can apply online.
I have an ABN and a TFN. It's quite common.



Sonic, the guy telling you that was getting mixed up with a few things.
When you are employee, you pay tax through your Tax file number, and you can do a tax return at the end of the year, just like anywhere really.

When you are an external contractor, then you look after youtr own affairs. Yuo are basicly self employed and hiring your services out to what ever company. Here you ger paid on an ABN, which means that they don't deduct tax (as you aren't one of their employees) and you are supposed to organise it yourself at the end of the year, they also won't pay you sick days, holiday pay and various other employee benefits. Most of the time you don't have a choice, its up to the company you work for that decide if you'll be TFN or ABN depending on how they run the business. Some companies people to switch upon request.

Feelgood

Mellor wrote: »

you don't need to register a business to get an ABN, anyone can apply online.
I have an ABN and a TFN. It's quite common.

Really!?. Well then let me ask you this out of pure curiosity. Whats stopping me from registering an ABN and giving that ABN to a handful of people so that they can get their 2nd year visa?. Obviously you would have to register it to correct area code and that, but isn't that a big hole?

I'm sure plenty have done it and charged for the privilege of using such an ABN. Are you not required to submit a tax return for that ABN every year though Mellor?. What I mean is, if you are not an external contractor there is no benefit in having an ABN just sitting there for the sake of having it?.

Mellor

Feelgood wrote: »

Really!?. Well then let me ask you this out of pure curiosity. Whats stopping me from registering an ABN and giving that ABN to a handful of people so that they can get their 2nd year visa?. Obviously you would have to register it to correct area code and that, but isn't that a big hole?

The ABN is just a company reference number. And has got little to do with the 2nd year WHV, immigration would have to contact you to verify those people worked for you, check up your details etc. As soon as one person didn't get passed, they'd probably sell you out quite quickly.
This was happening lst year and people were caugth.

ABN's aren't some secret number, they are all freely available and searchable via an online database.

Are you not required to submit a tax return for that ABN every year though Mellor?. What I mean is, if you are not an external contractor there is no benefit in having an ABN just sitting there for the sake of having it?

No requirement to submit a tax return every year if you aren't using it, you are suppose to if you are using it. Some people also sort it all out at a later date.

There's no benefit to having one sitting there if you aren't going to ever use it. I never suggesting there was. I was just pointing out that you don't have to be a registered company to get one and that a individual can apply and get one.

Diddler82

1. Technically you have to be a resident to obtain one and tick a box in the online declaration AFAIK

2. Irish people over here (in Sydney anyway) use it generally to avoid paying ANY tax and then just go home then without paying a cent tax, however a lot of companies are insisting on a TFN for payment now in construction...only over the last 2/3 months has I heard of this happening

3. There is also the Living Away From Home Allowance (LAFHA) which is 99% above board. Search back through this section of boards.ie there is some useful info there

Mellor

Diddler82 wrote: »

1. Technically you have to be a resident to obtain one and tick a box in the online declaration AFAIK

Afraid this is wrong. You don't have to be a resident, nothing of the sort.
You have to be a resident for tax purposes. The two are totally different. On a WHV you are a resident for tax purposes.

2. Irish people over here (in Sydney anyway) use it generally to avoid paying ANY tax and then just go home then without paying a cent tax, however a lot of companies are insisting on a TFN for payment now in construction...only over the last 2/3 months has I heard of this happening

Hmmm, sort of.
It does happen, I know that's true. People go home without paying off their tax. Others get hit with a tax bill when getting sponsored or when apply for PR.

But it makes no difference the company that's paying you if you pay tax or not, and the choice between ABN or TFN is totally up to the company and not the individual. You can't just decide to get paid via an ABN number and not TFN. Generally companies are either one or the other depending on how they work. One of the larger construction companies recently switch to TFN only, but that was down to the fact that people paid ABN weren't counted as employees, which creates problems with sponsorship.

3. There is also the Living Away From Home Allowance (LAFHA) which is 99% above board. Search back through this section of boards.ie there is some useful info there

LAFHA is a strange one. It's not actually reduced tax payments (which is what I thought) but a separate payment from your boss, that is declared as lafha, some companies just don't want to know. Which is annoying as it costs them nothing.
I've heard so many conflicting stories about which visas are eligble. PR is not eligble, I know that. Temp visas should be, WHV i'm not sure but msot appear to get it by.

Diddler82

Mellor wrote: »

LAFHA is a strange one. It's not actually reduced tax payments (which is what I thought) but a separate payment from your boss, that is declared as lafha, some companies just don't want to know. Which is annoying as it costs them nothing.
I've heard so many conflicting stories about which visas are eligble. PR is not eligble, I know that. Temp visas should be, WHV i'm not sure but msot appear to get it by.

I will stand corrected on the first two points and merely add to this one

I have had LAFHA on WHV and now 457. Yes it is completely down to the employer if they choose to pay it or not, It is a good benefit to have though we should not be entitled to it (strictly speaking). It is basically for people who have accepted a job that required them to move State/Country to accept the job. As I (and most Irish) came to Australia by choice, the company don't have to pay it unless they ship you to a different state (again AFAIK).

Generally the large companies don't entertain it at all in the experiences of some of my friends when talking to HR in their respective employers. Also in Construction for smaller companies friends of mine have been simply looked at as if they had 10 heads when it was mentioned as a lot of companies dont know what it is.

Feelgood

Tis a strange one alright, I am on a 457 with LAFHA at the moment and I knew absolutely nothing about LAFHA when I first got here.

It was actually the director of the company that is sponsoring me that mentioned it to me. When he told me about it first I thought he was taking the mick and trying to swindle me out of cash or something but in fairness he was completely upfront about it and made sure I got every penny I am entitled to. If its an employer thing there must be some incentive for them also otherwise no one would pay it at all!.

It is basically for people who have accepted a job that required them to move State/Country to accept the job. As I (and most Irish) came to Australia by choice, the company don't have to pay it unless they ship you to a different state (again AFAIK)

LAFHA is only available to ex-pats, Australians can't claim it at all. So basically to qualify you just have to be from another country and working here on a temporary work visa 457 etc. WHVs don't qualify I think as they get to claim tax back when they go home. The minute you put an application in for PR you lose your LAFHA benefits.

In fairness though its very decent, rent allowance and food allowance to the tune of $1500 a month or so. The strangest thing is if you missus is living with you and she a foreigner too you get more LAFHA based on the idea that you have to feed and house her too

Mellor

Feelgood wrote: »

LAFHA is only available to ex-pats, Australians can't claim it at all. So basically to qualify you just have to be from another country and working here on a temporary work visa 457 etc. WHVs don't qualify I think as they get to claim tax back when they go home. The minute you put an application in for PR you lose your LAFHA benefits.

I'm not sure where you got that idea, but its not just for ex-pats. If an australian was sent away from his home for 1 week, 1 month, 6 months etc his employer pay him a LAFHA and it would be tax free.

You've also mentioned WHV claiming tax back, this is isn't true. They aren't claiming all their tax back, its just correcting the tax you paid based of expenses you has during the year (you claim every july).
I think you mixing it up with super, which you claim once you leave.

Feelgood

Mellor wrote: »

I'm not sure where you got that idea, but its not just for ex-pats. If an australian was sent away from his home for 1 week, 1 month, 6 months etc his employer pay him a LAFHA and it would be tax free.

You've also mentioned WHV claiming tax back, this is isn't true. They aren't claiming all their tax back, its just correcting the tax you paid based of expenses you has during the year (you claim every july).
I think you mixing it up with super, which you claim once you leave.

I may just shut up and stop listening to people
Thats the explanation I was given about LAFHA, that it doesn't apply to Australian citizens - but after some research yeah you are right. Looks like Aussies can qualify for it too.

I understand the regular tax return in July for WHVs and everyone else alright, but isn't there a % of that that can be claimed back once you return home apart from the super?. Like because you aren't an Aussie citizen you can claim back a % of the tax you paid while working abroad?. i.e. you have to have left te country to claim it?. Its what the likes of taxback.com and them work off?.

ballooba

Feelgood wrote: »

LAFHA is only available to ex-pats, Australians can't claim it at all.

This is incorrect. LAFHA is of course for Aussies. It's for anyone Living Away From Home.

As for the ABN, if you have more than one main client you get taxed at corporate rates.

Feelgood

ballooba wrote: »

This is incorrect. LAFHA is of course for Aussies. It's for anyone Living Away From Home.

Yeah I spotted that mate

The guy that told me that LAFHA was just for ex-pats happens to be the director of the company thats sponsoring me and doing all my accounting!. Which is a bit worrying to say the least!

And hes an Aussie! :pac:

WanderingWife

As for the ABN, if you have more than one main client you get taxed at corporate rates.

Not true. If operating as a sole trader you'll be taxed as an individual regardless of your clientele number.

People go home without paying off their tax.

Yes, and they whinge to high heaven when they are hit with legal action a few months down the track. *LOL*

Here you ger paid on an ABN, which means that they don't deduct tax (as you aren't one of their employees) and you are supposed to organise it yourself at the end of the year, they also won't pay you sick days, holiday pay and various other employee benefits. Most of the time you don't have a choice, its up to the company you work for that decide if you'll be TFN or ABN depending on how they run the business. Some companies people to switch upon request.

Hmm…there’s a lot of inaccurate information in this thread so let me just start with the most glaring.

An ABN is not a company reference number. It's an Australian Business Number which denotes you are working for yourself and gives you a few advantages like, for example, being able to quote this to other businesses for GST inputs/waivers when buying materials for your business. That’s it really. Normally it is connected to your personal tax file number as most individuals operate as sole traders and not as companies. If you were operating as a company you would have your own Australian Company Number which is connected to your Company TFN.

You don’t just leave your tax ‘until the end of the year/your stay’. You must take tax out as you go (PAYG) and you must submit it to the Tax Office. Failure to do this may result in a nasty surprise come the end of financial year (30 June). The Australian tax office is ruthless. They don’t buy the “I didn’t know..” scenario and will fine you accordingly.

When you operate under an ABN your hourly rate that YOU dictate (not the business you are outsourcing for). This hourly rate covers your holiday pay and other entitlements. Out of this you must also remember to pay insurances like WorkCover and public liability for as a contractor you are not covered so if you end up in hospital after falling off scaffolding well, the Medicare reciprocation agreement only goes so far as does your holiday travel insurance as it does not cover commercial activities. God forbid if someone sues you and you aren’t insured. Ouch.

Also, just because a company asks for your ABN and says you are a contractor, doesn’t mean you are and does not mean you have to be. Yes, you DO have a choice. And no, companies can’t just “switch” from one to the other when they feel like it. The law decides whether a TFN or ABN is applicable, not the business and the vast majority of jobs are TFN/employee based.

There are very strict rules as to what constitutes a contractor and if you don’t fall within those guidelines, come tax time you are in for a nasty shock and the contracting body-cum-employer is in a lot of trouble. There are a lot of unscrupulous businesses in Australia who target backpackers and do the contractor thing and a lot of it is not lawful.

If you have any further questions regarding running a business or meeting your obligations under the Australian taxation system, feel free to ask and I’ll be happy to help. And if the question is complex and/or I just can’t answer it, I can refer you on to people who can.

Mellor

wanderingWife, did you bother to read any of the thread?
What a mess that post just was.

WanderingWife wrote: »

An ABN is not a company reference number. It's an Australian Business Number

I am well aware what it stands for.
Please read the thread, when I said reference, it was in relation to a 2ndWHV aoolication, which it is.

like, for example, being able to quote this to other businesses for GST inputs/waivers when buying materials for your business.

Ironically, you'd be referencing you business when you did that. But that's irrelevant.

You don’t just leave your tax ‘until the end of the year/your stay’. You must take tax out as you go (PAYG) and you must submit it to the Tax Office. Failure to do this may result in a nasty surprise come the end of financial year (30 June). The Australian tax office is ruthless. They don’t buy the “I didn’t know..” scenario and will fine you accordingly.

I pay TFN for most of the year, I adjust in june for ABN, never had an issue. Maybe if it was all ABN I might, I don't know. But looking at the sheer number of people on Whvs who don't, I doubt it.

When you operate under an ABN your hourly rate that YOU dictate (not the business you are outsourcing for). This hourly rate covers your holiday pay and other entitlements.

HAHA, nonsense.
If you are in a position for dictate an hourly rate, great for you. But in the current climate, a lot of people take on a contract offered by the company at a rate the company has set to, if you "dicate" a higher rate, you'll get the door and somebody else will fill it.
Remember not everyone on ABN is worker with some sort of skilled training.
There is a big difference between a company approaching you and hiring your services for a job, and you applying for a adverised position.

Out of this you must also remember to pay insurances like WorkCover and public liability for as a contractor you are not covered so if you end up in hospital after falling off scaffolding well, the Medicare reciprocation agreement only goes so far as does your holiday travel insurance as it does not cover commercial activities. God forbid if someone sues you and you aren’t insured. Ouch.

Depends. most likely if working as a subbie on a site, but that doesn't cover all ABNs, I worked as a contractor in an office environment, I was covered by thier insurance, I made sure of this when agree a contract.

Also, just because a company asks for your ABN and says you are a contractor, doesn’t mean you are and does not mean you have to be. Yes, you DO have a choice. And no, companies can’t just “switch” from one to the other when they feel like it. The law decides whether a TFN or ABN is applicable, not the business and the vast majority of jobs are TFN/employee based.

This is wrong. In some situations it may apply, such as NSCs, SC, various trades on site etc. But it is also at the hands of the company.
If a company insists on hiring people as employees then they are free to do so. Paid TFN. If a company whats to contract a role out, they can do so also.

Notice I say sometimes as it depends on the situation. But you are so sure its always like you say. It isn't.
honestly, it sounds like you are considering your own situation and forgetting about or simply not aware of other situations where an ABN is used.

There are very strict rules as to what constitutes a contractor and if you don’t fall within those guidelines, come tax time you are in for a nasty shock and the contracting body-cum-employer is in a lot of trouble. There are a lot of unscrupulous businesses in Australia who target backpackers and do the contractor thing and a lot of it is not lawful.

Agreed.
Recruitment are also at it a lot.

WanderingWife

Why, what seems to be your problem, Mellor?

Mellor

Hit reply a bit early, its all there now.

WanderingWife

Ah, I can see why I was initially confused by your response as the resulting one you have since posted is very heavily edited.

Mellor, you appear to have mistaken my post for a personal attack and from what I can see, you have treated it accordingly. Unfortunately, what you state as being factual is not and as someone who not only runs their own business but works in the industry, you are sadly mistaken. If I could address your responses thus:

I pay TFN for most of the year, I adjust in june for ABN, never had an issue. Maybe if it was all ABN I might, I don't know. But looking at the sheer number of people on Whvs who don't, I doubt it.

You pay tax for most of the year. Good for you. But that wasn't the issue. The issue was leaving tax until the end of the year...which is a different matter.

If you are in a position for dictate an hourly rate, great for you. But in the current climate, a lot of people take on a contract offered by the company at a rate the company has set to, if you "dicate" a higher rate, you'll get the door and somebody else will fill it.
Remember not everyone on ABN is worker with some sort of skilled training.
There is a big difference between a company approaching you and hiring your services for a job, and you applying for a adverised position.

You are speaking from an emotional viewpoint, not a factual one. It's not nonsense. It's good business practice and it's also the law. I was referring to the guidelines as per taxation legislation in this country not from someone who is afraid of who might fill my position. The marketplace here is like any other: it's competitive. But that doesn't mean usurping rights and laws to get by and then saying that this is the right way to do it.

Depends. most likely if working as a subbie on a site, but that doesn't cover all ABNs, I worked as a contractor in an office environment, I was covered by thier insurance, I made sure of this when agree a contract.

Again, not true. It does. Granted, if you enter into an agreement with the business owner (and this is entirely possible and does happen) then great. But again, that's not what I was referring to. Yet again, I was speaking from a legal standpoint where insurances such as this must be a consideration as part of a lawful business operation.

This is wrong. In some situations it may apply, such as NSCs, SC, various trades on site etc. But it is also at the hands of the company.
If a company insists on hiring people as employees then they are free to do so. Paid TFN. If a company whats to contract a role out, they can do so also.

Again, you are generalising and apportioning an emotional element to legal argument. Yes, a company is free to employ who they like and outsource what they like (this was not the argument) but as long as they are employees or contractors as per the legislative requirements. A company who employs a person and then treats them as a contractor or vice versa is breaking the law.

Mellor, I only wrote what I did to assist, not to belittle you or show you up and unfortunately you appear to have taken it as the latter. I don't create laws, I simply follow them and was simply listing my concerns here because the majority of clientele who fall foul of these regs are, dare I say it, people on working visas.

All the best,
WW

Mellor

WanderingWife wrote: »

Ah, I can see why I was initially confused by your response as the resulting one you have since posted is very heavily edited.

I hit reply a bit early, the edited the response in straight away (well after I typed it).
It happens, Not really a big deal.

Mellor, you appear to have mistaken my post for a personal attack and from what I can see, you have treated it accordingly.

I don't see anywhere where i attacked you personally or treated you as so.
If you honestly thought so then I'd grow some thicker skin pronto, I don't think there was anything out of line in my post.

You are speaking from an emotional viewpoint, not a factual one. It's not nonsense. It's good business practice and it's also the law. I was referring to the guidelines as per taxation legislation in this country not from someone who is afraid of who might fill my position. The marketplace here is like any other: it's competitive. But that doesn't mean usurping rights and laws to get by and then saying that this is the right way to do it.



Again, not true. It does. Granted, if you enter into an agreement with the business owner (and this is entirely possible and does happen) then great. But again, that's not what I was referring to. Yet again, I was speaking from a legal standpoint where insurances such as this must be a consideration as part of a lawful business operation.



Again, you are generalising and apportioning an emotional element to legal argument. Yes, a company is free to employ who they like and outsource what they like (this was not the argument) but as long as they are employees or contractors as per the legislative requirements. A company who employs a person and then treats them as a contractor or vice versa is breaking the law.

I have no problem if I get corrected, it happens. I, like everyone, is wrong from time to time.
But when you take my comments out of context, (the 2nd WHV comment), and generally refer to them as glaringly inaccurate, I am going to defend them.

Seeing as you have since come back and agreed that those situations exist, but not what you refered to. I'm not really sure what your point was? I was talking to some posters about working on an ABN while on a WHV, which for the majority of people reading the thread is applicable. Then you arrived and "corrected" me based on your expierence of being a business owner. Slightly off topic seeing as you didn't refer to the situation that we were talking about.


Very few people on WHV set up their own companies. So i was merely trying to help some people who may be arrive soon to understand the difference between ABN and TFN. At the end of the day, when people have been looking for work in a saturated market and the savings are running out, then aren't too bothered with the tax records of a potential employer.

The legal obligations of a company were never a point of discussion. While you post was likely accurate for most parts, things like;

When you operate under an ABN your hourly rate that YOU dictate ...

... companies can’t just “switch” from one to the other when they feel like it.

are wrong, and basically the above two corrections are probably the most relevant to people arriving on a WHV.
As for switching, a large construction company recently informed all of its full-time contracted pipe layers that they would no longer be paid xx/hr ABN and from next week they would be direct employees paid yy/hr TFN. They could of course refuse, but they simply wouldn't a job on monday. You can claim this is illegal, but technically it is just the contract finishing up and the crew getting first refusal for the employee position that opened up.
I've worked with a company on both ABN and TFN.

Again relevant to people on TFNs, these situations are common. Especially regarding 457 visa applications.



Anyway, I think the thread has run its course, I really am not bother discussing ABN guidelines of australian business on this thread as I don't see how its in any way helped the OP and only confused the issue.
I still can't see where I personally abused you.

Diddler82

Mellor wrote: »

Recruitment are also at it a lot.

Are you referring to this?http://www.irishecho.com.au/2010/08/11/payfair-insolvency-impacts-irish-workers/4559

I don't know how this shower gets around the law.

However, I working in recruitment here and I have not seen this practice, that said I know there are probably companies out there that do it.

Mellor

That's not the one I refered to, but similar. I'd say most are legit, and I've met a few in recruitment who find their companies great. But I've also met a few people, generally just arrived, that were getting screwed by companies. Basically, they contracted out people, but handle the payroll, which is fine in its self. But they were then screwing them in terms of tax/super/hourly rate.

Diddler82

Mellor wrote: »

Anyway, I think the thread has run its course, I really am not bother discussing ABN guidelines of australian business on this thread as I don't see how its in any way helped the OP and only confused the issue.
I still can't see where I personally abused you.

I have to agree on that.

WanderingWife, you have put a lot of effort into posting here but as Mellor said, this is about Irish people on WHV/457 and that was the purpose of the thread not about how Australian business is run.

I got a bit confused there half way through so thanks Mellor and thank fcuk I'm on TFN with LAFHA

Mellor

Diddler82 wrote: »

I have to agree on that.

WanderingWife, you have put a lot of effort into posting here but as Mellor said, this is about Irish people on WHV/457 and that was the purpose of the thread not about how Australian business is run.

I got a bit confused there half way through so thanks Mellor and thank fcuk I'm on TFN with LAFHA

Laughin' with LAFHA



...none for me atm

STIG83

What is the address to apply for an ABN online? Do you have to pay to get one? I know the're websites that make you pay to get one, are they a scam?
Thanks.

Mellor

STIG83 wrote: »

What is the address to apply for an ABN online? Do you have to pay to get one? I know the're websites that make you pay to get one, are they a scam?
Thanks.

https://abr.gov.au/abrweb/default.aspx?pid=90&sid=1&outcome=2&scripting=true&cookie=true