Hi Simon,
Ive been both a contractor and also permanent staff on and off for many
years...
There is a good reason to get a PTY Limited company in that is says LIMITED.
In short it means that if you do something WRONG they can only sue the
COMPANY for every cent it has.
Leaving YOU with your house and car and other possessions intact.
If you only have a business name and you do something WRONG then they
can not only sue every cent from your BUSINESS but ALSO every cent YOU
own INCLUDING your house and car and other possessions.
We are not talking about deliberate wrongdoing here just stuffing up. So
it's more expensive for a PTY Limited company but you have that
protection. The company is treated like an individual and the company
cops the flack. Not you. Your choice. Is it worth the risk in these
litigious days?
Also the 80/20 rule don't worry about it.
The tax office only gets upset when you try to defraud it of tax.
If you pay your correct amount of tax then the tax office does not care
at all about how many contracts you have.
I had one and only one contract with a government dept for 8 years and
no problem. I paid the correct amount of tax.
It may well happen that you get a good client for a year or so. What is
the tax dept. going to do? Say get a job elsewhere? No. Pay the right
tax and you won't hear a word.
Contact me off-list for a couple of accountants you can choose from.
Hope you'll like doing BAS statements!
Ben
Rev Simon Rumble wrote:
Hi folks.
I'm about to start contracting and it seems it's a lot more efficient to
have things wrapped into a company. I've been looking around and seeing
stuff about the "80/20 rule" and the like, which determines whether you
can apply company tax instead of personal income tax, and other stuff.
So does anyone out there have any (IANAA) advice on such things? Any
recommendations of accountants to get advice from? Ideally accountants
who can deal with free-software ledger systems...
Oh and yes, those of you wondering, I'm back in Sydney.
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