Foreign income tax offsets

Tax warning on overseas income

Do you earn income overseas? A recent case highlights why you might pay more tax than you thought on foreign income.

tax planningIf you are an Australian resident and earn income from overseas, such as income from investments, sale of assets such as property, distributions from foreign trusts, etc, you will generally need to declare that income in your Australian tax return. If you have paid tax in a foreign country on that income, you might be able to claim a foreign tax offset to reduce your Australian tax liability. 

Sounds simple enough but a recent case highlights where problems can occur and you might end up paying a lot more tax than you thought. 

Read more…

Legislation in limbo

A budget, an election and the legislation that hasn't made it through

The February 2019 Parliamentary sitting days were the last opportunity before the Federal Budget for the Government to introduce or push through new legislation. 

tightropeNext month, on 2 April, Parliament reconvenes for the Federal Budget and it's likely that an election will be called very soon after that (18 May 2019 is the last possible date for the election of the House of Representatives). Any legislation that has not passed when the election is called basically goes back to the drawing board and may never be enacted.

With the focus of politicians firmly on the impending election and the asylum seeker debate, and the Government now in an untenable position following the loss of its majority in the lower house, tidying up outstanding business legislation was not the priority in February, and as a result, several key pieces of legislation are in limbo.  Read more…

Contractor vs employee

The implications of misclassifying a worker

If a business misclassifies an employee, it impacts on superannuation guarantee (SG), PAYG withholding, workers compensation, and payroll tax. 

contractorsThese entitlements will often need to be met even if the misclassification was a genuine mistake.

For SG obligations, there is no real time limit on the recovery of outstanding obligations. However, the ATO will generally only go back 5 years unless the individual employee can prove an entitlement beyond this point. 

Remember that employers that fail to make their superannuation guarantee payments on time don't just pay the outstanding superannuation but are subject to the SG charge (SGC) and lodge a Superannuation Guarantee Statement. 

Read more…

Contractor or employee?

Contractor or employee? 

Defining workers in the gig economy

foodA former Foodora Australia delivery rider, Joshua Klooger, recently won an unfair dismissal claim despite a service agreement that classified him as an independent contractor. We explore the implications of the case.

Pivotal to the Fair Work Commission's decision was the classification by Foodora of Mr Klooger as an independent contractor. The "Corporate Rider" was employed under a service agreement titled "Independent contractor agreement". At the initial rate of $14 per hour and $5 per delivery, corporate riders would log into an app (the shifts app) which, at predetermined times each week, displayed available shifts. The shifts identified start and finish times and a specific geographical location where the delivery work would be undertaken. The riders could then decide what shifts they wanted. Read more…

Engaging contractors

What to do if you engage contractors

If you engage contractors, it is essential to get the facts of the relationship right. 

contractorBusiness owners need to take a proactive approach to reviewing arrangements to ensure that the business is not exposed to material liabilities. 

Key factors include:
  • Whether the work involves a particular profession or skill set.
  • The level of control the contractor has over how the contract is executed.
  • The ability of the contractor to delegate work to another person.
  • Whether the contractor supplies his own tools or equipment.
  • Whether the contractor has his own place of business.
  • The contractor's ability to generate goodwill or saleable assets during the course of the contract.
  • Read more…