Budget 2018/19: Contractor Reporting Extended

Share us on…

Share on facebook
Share on twitter
Share on linkedin
Share on email

Budget 2018/19: Contractor Reporting Extended

The Coalition will expand the current “contractor reporting” requirements that apply to the construction and cleaning industries (and a few others) to more industries.

Our guess is that eventually, all payments to contractors will need to be reported, across all businesses and industries.

The short summary on why contractors are a problem for the Government is:
a) Most payments to contractors are not reported to the ATO, so a contractor could put one figure on a tax return, but have actually received another
b) Contractors generally have no tax withheld from their payments, so if a contractor doesn’t do a tax return for 5 years, the ATO can easily be out of pocket $150k. If a wage earner did the same, the ATO has already had the $150k paid to it
c) Businesses use contract arrangement to try and avoid super, leave, penalty rates, and other entitlements that employees have
d) The flow on effect is that contractors have lower super balances, and therefore rely on Government services more in later years

Make no mistake, contractors are a target.

Have Any Questions?