Today I completed an ABN registration, and noticed some substantial changes to the process.
The changes I am discussing today are in regards to the questions asked in relation to being a contractor, this is where you will be asked:
Are you applying for an ABN to operate as a contractor?
If you answered “YES”, you will then be asked the following;
Will your work agreement allow you to pay another person to perform work on your behalf?
Will you be responsible for providing heavy machinery to undertake your business activity?
If the answer is “NO” to the above two questions, then next you will be asked;
Will the payments you receive be based on a quoted price that you provide to persons making use of your services?
Will you be responsible for the cost of rectifying any defect in the work you perform?
And if “NO” is answered again, then the ATO would not regard you as operating an enterprise, therefore unable to apply for an ABN.
If at this point, you continue on and register for the ABN, you may be commiting an offence and be prosecuted for providing a false or misleading statement.
My thoughts – I have always disliked people being put on as contractors, when quite clearly there is a employee/employer relationship. The main reason why people are contracted rather than employed is so their “Boss” does not have to pay their entitlement such as workcover and superannuation.
These changes will make people more aware, and hopefully less will be now be employed as contractors and more as employees.
Unfortuneatly the contractor will need to make the choice of possibley not working or being prosecuted for providing a false or misleading statement when applying for the ABN. Where as the “Boss” still has the power over the contractor and can still take advantage.