warwick road

Anyone else on here work as a contractor in either the engineering or I.T. industries?

I have heard they have something similar to the hated IR35 over there, do contractors also work as umbrella companies to get round this a la the UK???

Vicky88

Hmm I'm not sure. I vaguely recall sometime ago that the Aussie gov. was cracking down on one man limited companies ala IR35 but not sure of the regulations. Following is the link to the ATO website where it defines who is an employee and who is a contractor but not sure if it applies to one-man limite company. They have a facility on their website to email questions so might be worth dropping them a line.

http://www.ato.gov.au/businesses/con...1/003&st=&cy=1

As for IR35, that was the very reason we left the UK. Got sick of Gordon Brown increasing NI every year in an effort to balance his budget at our expense.

Vicky88

Ok this is one of their rulings with details of other bits to be read at the end

http://www.ato.gov.au/content/downlo...ngGuideNo2.pdf

Vicky88

Think you are screwed as the rules seem similar to IR 35.

http://www.ato.gov.au/businesses/con...tent/13276.htm

http://www.ato.gov.au/SearchResults....go.x=13&go.y=8

JaneandJim

I don't think there are ways round it like there are here. Its just as easy to work PAYE.

warwick road

Well you will be pleased to know Vicky that a court recently ruled in favour of a contractor (I think he was at BNFL and he had been working there for 7 years!) when that nugget Gordon Brown and his merry band of thieves tried it on. A few things came out of the case that have heavily strengthened things in favour of the contractor - basically it all boils down to the wording of the contract, as long as you can get your contract sorted they can't touch you.

I have been an engineering contractor in the UK for 7 years now and i'm hoping to carry on as i am in Perth, but it took time for contractors to get it together and get them selves sorted(legally) over here and i'm wondering if OZ has gone through the same process yet. Obviously the governemt/ATO are not the people to answer this question!!!

If anyone is out there contracting as a one man band or as an umbrella/composite company then i'd love to hear from you. There must be someone as I believe Perth is booming at the moment in the Oil/Gas Industry..........

Cheers, Danny

warwick road

PAYE!!! You obviously have too much money!!!

If u wanna give any more away i'll give you me address!

Vicky88

IR35 really pissed us off big time mainly because despite what the government says a contractor does not have the same rights as an employee. There's not sick pay, no holiday pay, and they can give you the arse without any explanation or redundancy payment with 5 minutes notice.

My husband contracted at Cellnet for 2 1/2 years before IR35. Then we came to the US for 3 years and he returned to Cellnet for another 18 months. We found it was just not worth our while once we took into account IR35 so returned to the US and he is now an employee.

Have to say we love not having to do the paperwork associated with having a company.

Sandra

When you get it sorted in AUS for contracting - give me a call, I have yet to see the benefit for one man band contracting unless you are very good at moving money around, via family trusts etc and possible short term investment.

Me - IT employee, with family.

Cheers

JaneandJim

I didn't mean I was enjoying it! I don't think there's any way round it over there, at least not in IT. They didn't apply it in the dog-eared way it was applied over here. I have a friend who was a contractor in Sydney, and if there was a way round it, he'd have found it!

Jane

warwick road

its sweet now

basically a lot of people panicked over IR35 because they listened to the inland revenue. If they had stood firm and ignored it(like many did) they would have been sound because legally(the way it was worded and the way they proposed to enforce it) was all wrong. They were on dodgy ground from day 1, how can you class an independent contractor/consultant as an employee?? Basically showed themselves up for the tools they are, lets tax everyone to the max mentality. And for what? So they can sort a few more refugees out with tellys?

Vicky88

Yes the UK were foolish in the way they introduced it. I am sure that we were not the only ones who left because it was so expensive.

I think they have made it a bit tighter in Australia because they have specifically introduced legislation relating to setting up a one man company just for tax avoidance.

HiddenPaw

My husband is a Solutions Architect contractor. He works PAYE. Absolutely no benefit to setting up your own company.

Also as a contractor, you still have to pay 9% compulsory superannuation contribution.

At the end of the financial year tho, he was able to claim a lot back on his tax return - but then again he has used his own laptop for the last year, worked from home a fair bit, and spent a hell of a lot of time driving between head office and his client sites across Melbourne.

So I'd say, work PAYE but get a good accountant!

Megalania

One man & one client - no advantage over direct employment.

One man and 3 clients - advantage only if your total earnings significantly exceed one client direct employment. Generally not achievable in applications development but support roles more likely. But way to go if you can sell yourself well because you can deduct cost of working which direct employees can not.

owieb

Totally disagree. There are many benefits to having a company even if you are a one man band.

For a start you can claim back much more for tax than you can on just PAYG; a company has a lower rate of tax, 30% where as PAYG has maximum of 48%.

Everybody will have different circumstances, but I suggest people speak to an accountant and get their advice and don't dismiss setting up a company.