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Featured Construction Contractors

Simon Lillyman

Olrig Construction Services Pty Ltd

Cost Engineer, Quantity Surveyor
Skills: Construction Claims, commercial management and procurement
Industries: Building and Construction Services

Peter Atkins

Pressure Cleaning W.A

Concrete cleaning and sealing, Antigraffiti application, Anitislip application
Skills: Good customer service skills
Industries: Building and Construction Services, Other Repair and Maintenance

Salma Mithani

Platinum Matrix Recruitment Pty Ltd

Recruitment, Human Resources, Marketing Consultant
Skills: Recruitment , Administration, Client Relationship Management
Industries: Metal Ore Mining, Employment Services, Other Administrative Services

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Industry Discussion

Proposed Changes to Tax Reporting Regime

Although there is estimated to be over 300,000 contractors in the Australian construction industry, the ABCC (Australian Building and Construction Commission) is investigating the extent of "sham contracting", which is where a contracting entity is set up purely to avoid tax.

Additionally, Assistant Treasurer Bill Shorten states that some contractors are either unaware of their tax obligations, or that they are deliberately under-reporting their tax.

There has been increased talk that the Government will be targeting various sectors in the Australian market to bring about a major crackdown on tax avoidance. In particular, the budget papers (page 47) refer to a crackdown which will take effect from July 2012 – which will see an increase in tax revenue of approximately $300m in 2014 – 2015, with a target of $513m over 4 years. The new reporting regimes will impact construction contractors, the construction service industry and construction consultants.

Various industry bodies are concerned at this move, some claiming that the Government is seeking to destroy the independent contracting industry.

What is proposed? The Government will require certain (client) businesses to report annually on payments made to contractors in the building and construction industry. They will be required to report on information that they should already be collecting under the current tax arrangement. The ATO will then use data matching to compare the incomes declared by contractors. This will improve voluntary compliance to increase taxation revenue by approx. $46.4m in 2012. It is proposed that some of the increased taxation revenue will be used to provide education and assistance to the industry.

Where this will go remains to be seen but you can look at the consultation paper which sets out the basis and reasons behind the change in the current systems.

You can also review the 11 submissions in response to the “consultation”. This is something all contractors and independent contractors in the building and construction sectors will have to remain aware of. After all, the new reporting regimes are proposed to take effect from July 2012. Not that far away!

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