COMMENT

Taxation and Contractors - Kaylene Camuti

Below is a link to the web version of Robert Gottliebsen's article in today's (4/7/01) Australian on the new RETROSPECTIVE personal services taxation rulings.
Many of you may have already seen this article and his editorials over the last three days. It seems most people have become focussed on the 80/20 test, but passing that test only allows you to undertake the self-assessment process and you must still face the other tests. If you have been fortunate enough to obtain a good long-term contract and therefore fail the 80/20 test, then you have to apply to the commissioner for a ruling using an application form that Gottliebsen describes as "BAS multiplied by four", requiring expert help (and, of course, increased accountant's fees). If you fail the tests you will have to pay personal income tax on all earnings and many deductions will be disallowed - retrospective to 1st July 2000.
If you want to follow up on this, Robert Gottliebsen's editorials are available through this Gottliebsen link.
There are also examples of letters that he has received about this issue.
I've also attached an email from John Elliot, a geologist who has been chasing up the implications of the new tax rulings and has posted a couple of articles on the AIG Forum site.
I would suggest that any of you who are operating as businesses/companies should check with your accountant. According to my accountant, geologists are amongst the professional groups the ATO will be targeting.

As if we needed this on top of everything else.
Regards,
Kaylene Camuti