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Personal services income and capex

Discussion in 'Accounting, Tax & Legal' started by rumoid, 17th May, 2009.

  1. rumoid

    rumoid Member

    Joined:
    6th Sep, 2007
    Posts:
    18
    Location:
    nsw
    Hi all

    I do a little bookkeeping a couple of days a month from home and I was wondering firstly if it is PSI or I am personal services business= the ato site is a little confusing but seems to suggest I am a personal services business...

    I work for one client(only) 2 days a month
    I provide my own tools(use of home as office and laptop/software etc)
    I have to correct any defective work
    I deliver a set objective every month(ie monthly reports)


    My question is how does being a PSB differ from PSI and secondly i am considering a very expensive office chair purchase will I be able to claim the capital allowances/depreciation and also the investment tax credit for this (if enshrined in law)? I work from my spare bedroom which is a unused bedroom/home office I also use the office to work from home occasionally.

    Are there any other costs I should be claiming?

    Any help is greatly appreciated.

    Thanks

    R.
     
  2. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    It really doesn't matter.

    The net income from the business will be taxed in your name if you are registered as a sole trader - PSI or no PSI.

    Seek specific tax advice or call the ATO for confirmation.
     
  3. rumoid

    rumoid Member

    Joined:
    6th Sep, 2007
    Posts:
    18
    Location:
    nsw
    thanks superman

    I find it difficult to get time to call the ato with my day job..

    My understanding is that there is a difference between psi and psb with the items you can deduct...can anyone clarify please?

    Thanks

    R.
     
  4. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Basically, if you derive PSI then you are treated as an "employee" from a deductions viewpoint - very restrictive.

    Too big & messy to try to explain in detail, many catches & exceptions depending on circumstances.

    Better to trawl through the ATO website.

    Cheers,

    Rob
     
  5. rumoid

    rumoid Member

    Joined:
    6th Sep, 2007
    Posts:
    18
    Location:
    nsw
    a very belated thanks Rob

    Cheers

    R.