Aggregated Awareness

From Robert Gottliebsen at the Business Spectator comes this commentary about the sleeper issue at this year's Australian Federal Election: Assistant Treasurer Nick Sherry's plans to decimate the existing Personal Services Income Legislation, which would drastically affect independent contracting in Australia.

This proposal by Sherry, can be expected to create a small & medium enterprise backlash.

And with Julia Gillard refusing invitation after invitation to stand behind the existing independent contracting industry, and with independent contracting being such a large part of the Australian economy, this issue looks to be a real separation between the 2 major parties coming into the 21st August Federal election.

Excerpt: "...Now the Board of Taxation has come up with a series of recommendations that would turn contracting into a nightmare. For example, under the proposed legislation independent contractors in Australia, such as plumbers or computer consultants, will need to differentiate between their income from capital (spanners, shovels and computers) and their income from labour (digging the ditches and writing software).

Under the Sherry-blessed plan, part of the income derived from labour would be attributed to the person who supplied the labour and those people would be treated as employees – not business people. The income earned on capital could be returned to the owner(s) of the capital, which may differ from the person who provided the labour.

The plumber and the computer consultant must make an annual report to the ATO so that the ATO can match data to see how many clients they have had in a year. Once the plumber and computer consultant are deemed to be employees, all their business deductions will be looked at in a different light. Their customers may be required to deduct tax when they pay the invoice..."

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