FBT Solutions

02 8079 2924

Contractors

Sydney, Wednesday 17 October from 9am – 1pm…  http://www.cvent.com/d/bcqz6n

Ten things you’ll learn at our Managing Employee Expenses, Entertainment & Allowances seminar:

  1. The tax distinction between onsite and offsite entertainment
  2. How to structure your GL account codes for food & drink, entertainment and travel expenses
  3. When drinking alcohol does not constitute entertainment
  4. The importance of understanding the participants role and business relationship
  5. Applying the minor benefit exemption rule
  6. Managing expenses in a foreign currency
  7. Best practice for credit card statements and payments
  8. The limited situations that travel diaries are required
  9. ATO focus areas on employees and contractors
  10. Maximising the ATO reasonable amounts whilst minimising documentation requirements

And a whole lot more …. Register online: http://www.cvent.com/d/bcqz6n


ATO focus on contractors

Contractors focus –

•  ATO conducted 1,100 audits on businesses that were suspected to be incorrectly employees as contractors
•  Data on payments made to 41,000 contractors, 18,000 were assessed as individuals (ie employee’s)
•  Overall 48% employee’s incorrectly categorised as contractors
•  Significant exposure to FBT (+ Payroll Tax + Super + Workers Comp)
•  ATO have online employee / contractor decision tool

 

 


The ATO’s focus for 2012 for SMEs – turnover of $2 million to $250 million

During 2012, the ATO’s focus in the SME sector will be on the following areas: participation of wealthy individuals in the tax and superannuation systems; the use of trusts to inappropriately minimise tax; Division 7A and the treatment of private company profits; capital gains; employer compliance with fringe benefits tax rules; the integrity of business systems for GST and excise obligations; and GST and property transactions.

To police this focus, the number of SME audits is set to rise, with the ATO planning to conduct 250 site visits to SMEs. There is talk about fringe benefit tax audits – 200 fringe benefit tax reviews are planned.

http://www.ato.gov.au/content/downloads/COR00326650_NAT7769.pdf


What is a contractor?

We often get asked – do we pay FBT on contractors. In order to answer that question

What is a contractor?

An independent contractor is an entity that agrees to produce a designated result for an agreed price.

Contractors can include:

sub-contractors

consultants

sole traders

companies

partnerships

trusts.

In most cases, a contractor:

is paid for results achieved

provides all or most of the necessary materials and equipment to complete the work

is free to delegate work to other entities

has freedom in the way the work is done

provides services to the general public and other businesses

is free to accept or refuse work

is in a position to make a profit or loss.