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cheesenightmare
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Getting Taxed/Fleeced

After sending an invoice into a XYZ Networks for contract work via an ABN, I just got processed as a casual employee and taxed at the maximum rate.

I told them I am supposed to get paid as a contractor and do the tax at my end. They said 'too late' and that it can't be reversed.

Then they told me that they had decided that all contract work by creatives from now on company wide would be treated as Casual employment unless the contractor was a PTY LTD - a limited liability company.

Any thoughts/similar stories?

Personally, I am wondering how I can have no recourse against a company forwarding a percentage of my money to a third party (governement) without my consent.





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Doug Suiter.
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7/May/2007, 2:17 pm Send Email to cheesenightmare   Send PM to cheesenightmare
 
footagehead
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Re: Getting Taxed/Fleeced

Hi Doug
I have had companies try this on. I now have access to a trusted company which will invoice on my behalf with an ABN and PTY LTD and then pay me promptly and allow me to deal with tax at my end. They take 3% of the total invoice for this service and will chase debtors on my behalf. The bigger picture for this is of course that your hourly rate must go up to compensate for this. I suggest a minimum of $5.00 per hour.
This could be the beginning of a big discussion on this forum so let me say from the outset that as far as I am concerned we all need a better hourly rate. Our defacto rate has been static for far too long.

Best Regards
Footagehead
8/May/2007, 12:58 pm Send Email to footagehead   Send PM to footagehead
 
cheesenightmare
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Re: Getting Taxed/Fleeced

Was that a company that is doing this for you as a personal favour or is this a company designed to do exactly this type of thing?



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Doug Suiter.
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8/May/2007, 1:21 pm Send Email to cheesenightmare   Send PM to cheesenightmare
 
footagehead
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Re: Getting Taxed/Fleeced

This was as a personal favour but after ringing him to discuss your situation he informs me he could do it for all of us. He informs me that this is the standard rate in the real estate industry and no big deal except for the trust issue - which of course is a huge issue for me and I suspect all of us.

Best Regards
Footagehead
8/May/2007, 1:30 pm Send Email to footagehead   Send PM to footagehead
 
cheesenightmare
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Re: Getting Taxed/Fleeced

Thanks Footagehead I appreciate you making that call.

Just so I understand properly, are you saying its a backdoor way of doing things - a workaround - rather than an actual legal arrangement (I'm making no judgements here, just trying to get the right idea).

What does he mean by the standard rate in the real estate industry? Why do real estate people have to do this?

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Doug Suiter.
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LondonFCP/SydneyFCP Administrator.

Find Local FCP Operators (Sydney & London) at the FCP Talent Registry: www.FCPTalent.com
8/May/2007, 1:59 pm Send Email to cheesenightmare   Send PM to cheesenightmare
 
footagehead
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Re: Getting Taxed/Fleeced

Its a frontdoor operation, a proper legal arrangement.
The reason real estate people have to do this is in the real estate industry all money received is banked into a trust account - because by law this money must be accounted for in a separate ledger and the real estate agent can only access the money after the client has been paid their money. And then the agent can get their 3% after agreement on the payment amount.
This is the basis of trust accounting I have just been told.
My friend tells me he has excess infrastructure set up in his company group and could handle this task without involvement in any other area of our businesses. He also got me going when he said for short callouts for 4% of the total invoice he could process client credit card debits on our behalf.

Best Regards
Footagehead
8/May/2007, 2:42 pm Send Email to footagehead   Send PM to footagehead
 
cheesenightmare
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Re: Getting Taxed/Fleeced

I like your friendemoticon

But since a big part of this limited liability thing is the fact that a limted liability company requires insurance...doesn't that mean his company's insurance must cover everyone he processes?



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Doug Suiter.
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LondonFCP/SydneyFCP Administrator.

Find Local FCP Operators (Sydney & London) at the FCP Talent Registry: www.FCPTalent.com
8/May/2007, 3:02 pm Send Email to cheesenightmare   Send PM to cheesenightmare
 
footagehead
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Re: Getting Taxed/Fleeced

Apparently not since in this instance the PTY LTD is only factoring the debt. The individual providing the service is still carrying the risk. The risk is limited to the amount on the invoice. Of course the terms and conditions on the invoice need to be presented to the client before work engagement. My friend also says he will consider getting a monster public liability cover for us.

Best Regards
Footagehead
8/May/2007, 4:10 pm Send Email to footagehead   Send PM to footagehead
 
Enzo Tedeschi
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Re: Getting Taxed/Fleeced

What a load!!

I don't think that Foxtel can do that!? I'd seek some more informed advice about that first - footagehead's is a good workaround, but they just can't do that to you in the first place...

You are responsible for your own taxes if you aren't a straight-up employee. Going PTY LTD is a major pain and a stack more paperwork and expense for such silliness.



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Enzo Tedeschi
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10/Jun/2007, 8:55 am Send Email to Enzo Tedeschi   Send PM to Enzo Tedeschi
 


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