Neil Fairley, one of our Queensland-based members, replied to our President's email and his article of the week (week 12) on PSI. He offered the following comments(copy of Neil's email):As you know compliance under PSI is my bread and butter. A common error individuals make is not understanding what actually defines a result when self-assessing as a contractor under the Results Test. For example, hourly, daily, piece rates and commission only are not considered to be a result, the courts have viewed these activities as an exchange of time (labour) for money. I won’t go into defining what the Results Test is really about. Most consultants can pass the first part of the 80% rule by virtue of having a number of unrelated clients who pay them for services rendered during the course of a financial year. However it’s equally important to pass at least one, preferably more of the subset tests to be actually considered to be operating a Personal Services Business. When a relationship with a client morphs into a long term engagement providing the majority of income to the individual then the relationship changes to that of employment. Many of my clients have not been aware of the regulations which require payments to individuals who are providing labour based services to be declared, in most cases for WorkCover or Payroll tax calculation purposes. Another Myth is that when an individual invoices for their services via an ABN, Company or Trust they are automatically in business – this is not correct at all, the Personal Services Income (PSI) legislation and Industrial law must be observed first. For any enquiry, contact Neil Fairley at neil@contractright.com.au www.contractright.com.au