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DJ Cooper Accounting offer expert advice and personalised accounting services to meet the needs of our individual and business clientele.

Our offices in Port Stephens, Raymond Terrace, Nelson Bay, Newcastle and Hunter area are at the heart of each region, so we can stay up to date with all the issues our clients face.

We offer a wide range of accounting and taxation services, including bookkeeping, company secretarial and formation, business support and auditing services. DJ Cooper Accounting also works extensively with clients in relation to the establishment and management of self-managed super funds (SMSFs).

We pride ourselves on providing services of an exceptional standard, as our consistent yearly  growth is entirely due to word of mouth referrals from existing clients and business colleagues. This, combined with on-going extensive technical training and development for our professional staff, positions us as an accounting practice of choice.

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Sometimes the only way to understand a person’s business or financial situation is by meeting face-to-face. All new clients or people looking to speak with an accounting professional are offered an initial consultation with the first hour at no charge. If you have some concerns and wish to take advantage of a confidential personal discussion simply call 02 4983 1611 to arrange a meeting.

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Sham Contracting: What you need to know

Posted on June 15, 2018 by admin

Employers who hire and treat an employee as a contractor could face serious penalties as well as claims for super contributions and worker entitlements.

A sham contracting arrangement refers to an employer who deliberately attempts to disguise an employee relationship as an independent contracting arrangement. This type of arrangement is illegal and a breach against the Fair Work Act 2009.

An employer that engages in a sham contracting arrangement is at risk of receiving:

  • A PAYG withholding penalty (for not deducting tax from worker payments and sending these amounts to the ATO).
  • A super guarantee charge made up of super guarantee shortfall amounts (which are made up of the amount of super contributions that should have been paid into a complying super fund) and an additional super guarantee charge of up to 200 per cent.
  • Interest charges.
  • Administration fee.

Each time an employer hires a worker, it is essential to check if the worker will be considered either a contractor or an employee. The difference between the two will affect how the employer’s obligations i.e., for tax and super.

To avoid sham contracting, ensure you know the difference.

Employee Contractor
Ability to subcontract/delegate: the worker cannot subcontract/delegate the work – they can’t pay someone else to do the work. Ability to subcontract/delegate: the worker can subcontract/delegate the work – they can pay someone else to do the work.
Basis of payment: the worker is paid either for the time worked, a price per item or activity or commission. Basis of payment: the worker is paid for a result achieved based on the quote they provided.
Equipment, tools and other assets:

  • Your business provides all or most of the equipment, tools and other assets required to complete the work, or
  • The worker provides all or most of the equipment, tools and other assets required to complete the work, but your business provides them with an allowance or reimburses them for the costs.
Equipment, tools and other assets:

  • The worker provides all or most of the equipment, tools and other assets
  • The worker does not receive an allowance or reimbursement for the cost of this equipment, tools and other assets.
Commercial risks: the worker takes no commercial risks. Your business is legally responsible. Commercial risks: the worker takes commercial risks and is legally responsible.
Control over the work: your business has the right to direct the way in which the worker does their work. Control over the work: the worker has freedom in the way the work is done, subject to specific terms in any contract or agreement.
Independence: the worker is not operating independently of your business. They work within and are considered part of your business. Independence: the worker is operating their own business independently of your business. The worker performs services as specified in their contract or agreement and is free to accept or refuse additional work.