Before the end of the current financial year, the ATO will be writing to some taxpayers asking them to review their tax return for the 2010-11 income year to work out if the business income they have reported may, in full or in part, be classified as personal services income (PSI) and subject to the PSI rules.
If any of your clients have been selected for this mail out, we will send you a letter in advance that will include:
- a list of all your affected clients
- a copy of the letter
The ATO would encourage you to review and discuss with your clients whether their business income includes any PSI. If you find, after reviewing your client's tax return that their income includes PSI and your client fails to pass the PSI tests, they will be subject to the PSI rules and will need to make a voluntary disclosure.
The ATO also encourage you to consider the PSI rules when lodging 2011-12 returns.
For more information, refer to the ATO's information - Personal services income - companies, partnerships and trusts and the information provided by ICB - PSI Laws Explained.