At the risk of another political thread I feel this issue has the potential to devastate small business.
Tried to just take the effects of the review from the original. Warrants further investigation as it has the potential to send small business into the abyss. Nick Sherry is an absolute knob and makes Barnaby Joyce a serious contender.
Unions have been hell bent on pushing their agenda through, and have been getting their way a bit to much lately. Up to a point it is fine but this is just stupidity. This has the potential to close the voting gap between labor and libs imo.
Sherry appears to be concocting one of the biggest attacks ever mounted on the small business community by a government minister in direct violation of solemn promises made by Kevin Rudd’s ALP at the last election.
In a nutshell, what happened was the Board of Taxation came up with a series of outrageous recommendations and Sherry – instead of saying that these recommendations were against ALP policy and that they would send small business into chaos – gave them his blessing and even thanked the unions for their input. Sherry has sent them off to the Henry Committee for review (Full coverage: Henry tax review).
So here are just a few of the ideas that Sherry now has on his agenda.
Each plumber or computer consultant in Australia will need to differentiate between their income from capital (spanners, shovels and computers) and their income from labour (digging the ditches and writing software).
Under the Sherry-blessed plan, part of the income derived from labour would be attributed to the person who supplied the labour and those people would be treated as employees – not business people. The income earned on capital could be returned to the owner(s) of the capital, which may differ from the person who provided the labour. Have you ever heard of anything more stupid? But the Sherry-blessed plan gets worse.
The plumber and computer person must make an annual report to the ATO so that the ATO can match data to see how many clients they have had in a year. If more than 80 per cent of the business income came from one group then whammo! You are an employee.
And once the plumber and computer consultant are deemed to be employees, all their business deductions will be looked at in a different light. Their customers may be required to deduct tax when they pay the invoice.
And, oh yes, every business must have two employees to be a business.
Also here (again will have to register)
It’s free to register on this site. Liberals should be all over this. Surely no one could be this stupid then to attempt this? It may be quashed but this is one of the reasons small business turned on labor before.