Hi James,
But if you are a "one-man company", and you do only have a single client and hence a single source of income, you can simply accept that you are a PSI entity. The only ramification to satisfy the ATO is that you pay the vast majority of your company's income as a single salary (to you) minus the legitimate costs of "running your company". About the only advantages this confers is that some costs you may have chosen to pay for out of your personal post-tax money, you can now pay for (partially / fully) from your company's funds. But not many. You definitely need the assistance of an accountant to ensure you do this appropriately. So as I understand it, it is still very feasible. You simply have to accept that you are earning your income as a PSI entity, declare that to the ATO, and plan how you distribute the income that PSI entity receives carefully. Cheers, Trevor From: [email protected] [mailto:[email protected]] On Behalf Of James Chapman-Smith Sent: Friday, 30 April 2010 11:21 AM To: 'ozDotNet' Subject: RE: Contracting to a single company Hi folks, You simply can't get away with PSI without serious implications from the ATO. You must earn at least 20% of your income from an independent source - ie no more than 80% from one company (or related company). You can NOT pay your spouse to do "secondary" tasks relating to your business to avoid PSI. Secondary tasks include accounting, marketing, etc. Primary activities would be like programming, installations, etc. So, "doing the books" does not count no matter if you have timesheets or not. The two biggest ways to avoid PSI is by having legitimate employees or by taking on projects that get you paid on completion not by the hour. You may have a single company as a client provided you don't charge by the hour and you must have a contract that clearly stipulates the deliverables required to get paid. Folks, the ATO has this sewn up and they are TARGETING IT professionals. Sorry for the bad news. Cheers. James. From: [email protected] [mailto:[email protected]] On Behalf Of Stephen Price Sent: Friday, 30 April 2010 00:17 To: ozDotNet Subject: Re: Contracting to a single company My wife is doing my books. You should hear her complain about it. And I have to really pay her to do it. The ATO understand. On Thu, Apr 29, 2010 at 3:12 PM, David Burstin <[email protected]> wrote: On Thu, Apr 29, 2010 at 5:03 PM, Trevor Andrew <[email protected]> wrote: What they don't want to see is your company earns X, and you pay a salary of X/2 to you and X/2 to your wife for "doing the books". Unless your wife really is doing the books, has timesheets to prove it, and is just paid for her actual time at a commercial rate. Cheers Dave Cheers, Trevor From: [email protected] [mailto:[email protected]] On Behalf Of Michael Ridland Sent: Thursday, 29 April 2010 4:37 PM To: ozDotNet Subject: Contracting to a single company Hi I've heard from some people that there is tax implications of contracting to a single company for more than 75 percent of your income, is there any truth to this? Thanks,
