Do You Have a Trust?

Earlier this year, there was a court case (FC of T v Bamford) decided that has major implications for all small business owners and investors who operate via a discretionary trust.

The Tax Office sought to challenge how the income of the trust was calculated and who should pay tax on the income of the trust.

In the end, the High Court ruled in both the Tax Office’s and the taxpayer’s favour.

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Sham Contracting

More and more employers are incorrectly treating employees as contractors and asking them to obtain an Australian Business Number (ABN) so that they can reduce labor costs.

The Tax Office recently produced an article labelling this type of arrangement as “sham contracting” and advised that they were focusing on these arrangements.

Some specific cases the Tax Office has recently seen is where workers that appear to be in employment, but are being treated as contractors by their employers include apprentices, call centre staff, process workers in poultry processing plants.

Having an ABN does not automatically make a person a contractor. Employers must consider the specific conditions under which they engage their workers.

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