Australia

Details

  • Service: Tax, International Executive Services
  • Type: Regulatory update
  • Date: 23/10/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Ben Travers

Ben Travers
Partner, Tax

+61 3 9288 5279

btravers1@kpmg.com.au

ATO heat stays on contractor arrangements 

by Ben Travers, IES Specialist

The Australian Taxation Office (ATO) continues to take the view that purported contractor arrangements are being misused by employers for the purpose of avoiding tax and superannuation obligations.

Notwithstanding recent suggestions from Minister for Small Business, Bruce Billson that the Coalition Government wishes to address the perceived attack by the ATO on the self-employed and independent contractors, the government does not necessarily have issues with the law itself. As such, employment like arrangements or arrangements that meet the extended superannuation or payroll tax definitions will remain an area of focus for the ATO and State Revenue authorities.

 

Reviews continue to take place across all industries, and with increased information sharing between the ATO and the State Revenue authorities, we frequently see ATO audits in this area followed by payroll tax audits carried out by the State Revenue authorities, particularly where non-compliance has been detected.

 

Businesses should continue to put processes in place to monitor relationships with individual contractors, even where an ABN has been provided, and should be mindful that payroll tax can still apply to genuine contractors (even those who trade though a company). An internal review or health check is recommended to ensure that arrangements with individuals, and family entities, have been correctly classified to ensure all employment tax obligations are met.

 

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