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.