Lisa Galbraith, General Manager – Cleardocs
It is common business practise to use a mix of employees and contractors to manage key projects, or to manage peaks and troughs in the business cycle. This practise needs to be carefully reviewed and managed to ensure that you, as business manager, are meeting all your legal and tax obligations. The recent announcement by the ATO that they will continue to conduct field visits to identify whether individuals are being incorrectly engaged as contractors provides further impetus.
If an employer is found to have incorrectly classified a contractor, there can be large financial penalties. The good news is that the ATO provides a simple tool online that can help you determine your contractor’s status. The ATO has said “provided ... answers [to the questions asked in the tool] reflect the actual circumstances of the arrangement, [it] will not charge ... a penalty”. So let’s be proactive.
Cleardocs can help
If you need an independent contractor Cleardocs recently launched an Independent Contractor/Consultant Agreement . It has been designed to address a number of circumstances; in particular this Agreement is relevant when the organisation wishes to engage a service provider who is:
- an individual;
- a "one-man-band" company — where the services are provided by a director or the only employee of the company (and no-one else is involved in providing them); or
- a small company — where the services are provided by a single nominated individual. In this context, "small company" typically means one to 3 directors.
Through the interface you can tailor the agreement to meet you business needs. For example you can specify:
- contractor qualifications
- resources to perform the service
- fee arrangements
- intellectual property requirements.
A flexible agreement to a common business approach.