| Personal Services Business Test |
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In order to be outside the personal services income measures, a company must satisfy certain tests as outlined below: * results test a contract is measured by an outcome or product and the contractor is liable to rectify any problems; or * no more than 80% of the business income is derived from a single source and you satisfy one of the following: - unrelated clients test you derive income from two or more unrelated clients and advertise available services; or - employment test you engage an individual(s) to perform 20% or more of the principal work; or - business premises test you exclusively use business premises that are physically separate from your home, or from the premises of the person for whom you are working. The consequence of failing the tests is that the income of the company becomes that of the individual and deductions are limited. These are complex rules, which require careful consideration. |