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Couriers Have Reason To Be Afraid

Publication date: 20 Aug 01 | Source: THE TAX INSTITUTE

'Couriers are a long way from knowing how the Personal Service Income rules apply,' said Ms McCleary.

With the Treasurer's statements currently being subject to reinterpretation by the Australian Tax Office, and further uncertainty for couriers caused by the recent High Court decision - Hollis v Vabu Pty Ltd - which indicates that certain couriers are in fact employees, there are a whole range of key questions unanswered including -

  • How are couriers to interpret the Treasurer's rectification test? Does the ATO have an identical view of this test to that of the Treasurer?
  • Are couriers now subject to double taxation in respect of superannuation payments, car parking and meals? Contractors that are covered by the new alienation rules will be subject to double taxation on these things.
  • Even if couriers pass the new test, will they be able to split their business income? The ATO's view on income splitting in these circumstances has not been made clear.

    By failing to address these crucial questions through legislation, the Government has failed to provide an answer - not only for the couriers, but also for all the other contractors who do not know the answers.

    'If the Government is unable to answer these questions, couriers have an ongoing reason to be afraid,' said Ms McCleary.