26 Oct 066 Attack on PSI legislation dismissed - FowlerThe AAT has dismissed an appeal by a taxpayer against an assessment based on the Personal Services Income (PSI) provisions of ITAA 1997. The taxpayer was a computer consultant employed by a company controlled by him as sole director and shareholder. He was also the sole employee. The company provided his services to "end users" introduced through 2 "labour hire firms". The company was paid at an hourly rate for the hours of service rendered by the taxpayer.
The taxpayer expressly disavowed that he was carrying on a "personal services business" within the meaning of the legislation and never sought a personal services determination from the Commissioner. The taxpayer's main ground of attack on the PSI provisions appeared to be that, as the company "owned" the income paid by the end users, it could never be derived by or attributed to the taxpayer. This was dismissed by the AAT, who held that the taxpayer "provided personal exertion services in exactly the situation contemplated by the legislation" (para 34): Fowler and FCT  AATA 808 (AAT, Block DP, 21 September 2006).
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