Managing Personal Services Income
Manage contractor, professional services clients
Avoid the traps and problem areas
Identify and work through PSI issues

 

Welcome to Knowledge Shop IQ (how IQ modules work)

 

The alienation of personal services income (PSI) rules are one of those areas where the details count. It's also an area that the ATO pays close attention to. 

 

This IQ module has been developed for accounting teams to explore the PSI rules and highlight those areas where the ATO is finding errors. We also work through the implications and limitations when your clients pass the PSI tests, and the treatment of clients who fail. Plus, we look at the interaction with Part IVA.

 

This module will help you manage clients that are contractors, agents, and sportspeople. 

 

See the IQ module outline. 

 

Level 2Level
Intermediate/ Accountant

LengthLength
80 minutes including quiz questions

KeyAccess
24/7 for 3 months

ResourcesResources
Downloadable reference notes

PD HoursPD Hours
1.5 PD Hours

The ATO has been paying close attention to taxpayers earning income from personal services in recent years to ensure that the tax is being paid by the right person and that deductions aren't being claimed inappropriately. In fact, some of your clients may have received a letter from the ATO on this.

 

This session explores the personal services income (‘PSI’) rules to highlight the areas where the ATO is currently finding problems.

We also consider the implications and limitations of passing the PSI tests and explore the situations where the ATO might seek to apply the general anti-avoidance rules even when the PSI tests are passed. Importantly, we also work through some opportunities for clients to overcome the PSI rules altogether.

Introduction & Outline (1:07)

  • What we'll cover
  • The structure and process to working with the PSI rules

 

Objectives of the law (2:10)

  • Giving the rules context - Recap on the policy concepts at play in the PSI rules
  • What the law says

 

What is PSI? (2:45)

  • Understanding what PSI really is and who is caught
  • What is not PSI and what is not caught by the PSI rules

 

Exclusions - what is not PSI (2:24)

  • Do business structures meet the PSI tests and if so, which ones?
  • The special rules for professional services firms and what the ATO looks at
  • Special rules for sportspeople

 

Is the entity a personal services business? (3:12)

  • Identifying if the client is running a PSB

 

The results test (5:14)

  • Working through the results test in detail
  • How to apply the results test and where are the barriers to passing
  • What does and doesn't qualify as 'producing a result'

 

The 80% rule (3:59)

  • Work through the 80%
  • Special rules for agents 

 

The unrelated clients test (2:29)

  • Why advisers get this test wrong
  • Working through the unrelated clients test

The employment test (2:34)

  • Working through the employment test
  • Understanding how the principal work condition applies in real life

 

The businesses premises test (2:36)

  • The traps of the business premises test
  • Applying the business premises test

 

PSB determination (1:45)

  • When it's appropriate to apply for a PSB determination
  • The conditions that need to be met

 

Managing clients that fail the tests (2:25)

  • How to manage the accounting side for clients that fail the PSI tests
  • What they can and can't access

 

Calculating net PSI & managing deductions (6:33)

  • Step by step through the net PS calculation
  • What deductions apply and how

 

PAYG Withholding (2:42)

  • Selecting the right method to apply PAYGW
  • Calculating PAYGW using the various methods

 

Part IVA and the opportunities (7:12)

  • What the ATO will look for
  • Income splitting opportunities that will work
    • Sportspeople and income splitting - the new guidance
  • Managing retention of profits - what you can and can't do
  • Partnerships - the special rules

Your turn

  • Quiz questions to test your knowledge in real life scenarios!

 

What is Knowledge Shop IQ?

Knowledge Shop IQ is engaging, interactive online training available when you want it on most devices. Featuring knowledge driven quizzes developed by our technical specialists, IQ also enables you to prove your knowledge - it’s training that moves well beyond hours completed to knowledge acquired.

 

If you are going to spend time completing training, make that time worthwhile.

 

Once you have accessed your first IQ training module, all other Knowledge Shop IQ modules and webinars you participate in will show on your personal profile.

For managers, Knowledge Shop IQ gives you the ability to:


  • Assign training to your team, and
  • Track and measure performance.

Knowledge Shop IQ is an essential tool for any practice looking to truly manage professional development.

 

You can register just one team member for a Knowledge Shop IQ module or your office**.

 

Got questions? Email us or call the team on 1800 800 232.

 

IQ Presenter

Michael Carruthers

Tax Director, Knowledge Shop

Michael Carruthers Director Knowledge Shop

Michael oversees the development of the tax team for Knowledge Shop and Hayes Knight in Sydney and is head of the Hayes Knight group’s national tax committee. 

 

Michael has a knack for seeing through the complexity and helping practitioners work through highly technical issues with certainty and accuracy. 

 

He is a member of the advisory panel for the Board of Taxation and was an expert panel member for the Board of Taxation’s review of tax impediments facing small business.

 

Linked In

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Michael was the 2016 Thought Leader of the Year at the 2016 Accounting Awards

Investment

Individuals

$195 Member*
$235 Non-member

 

Office**

$350 Member*
$390 Non-member

 

* Knowledge Shop members register through the member-only website

 

**The office rate applies per office location (maximum 25 participants per office). Each participant will be issued their own log in.  As Knowledge Shop IQ tracks individual performance no generic logins can be issued.

 

Members please log in from the registration page or register through the member-only website.

More on membership

 

Terms & Conditions 
All registrations to Knowledge Shop events are subject to our terms and conditions which include a cancellation policy. No refunds are provided once a module has been accessed.