I have an ABN which my fiance’ and I run two small business’s under.
One is already going but only generates around $600 per week (its on top of my full time job) and we also have another we are trying to get off the ground (which will mainly be my other half contributing too).
My partner is contemplating working as a subcontractor, on my ABN, as his current employer has offered him this way.
My question is this
Will he be able to get paid into the business account, under my ABN with me invoicing his place of employment under our registered business name , and then he draws a wage from that and the rest stays in the business account? We are trying to lower his taxable income as he is paid quite well, and we are also looking at me cutting back on my hours so I can work more from home on the other side of the business, so I would need to draw a wage from this account also.
We are just wanting to make sure that we are doing the correct things tax wise ect.
Merely redistributing income to you to avoid excess tax would give rise to a issue known as constructive receipt. I’m not aware of the exact nature of your business but as a worst case scenario you could be hit with a penalty under Part IVA as an avoidance scheme.
With consideration of the facts and the right structure, this can be avoided. I would recommend you speak to a half savvy accountant. If unavailable, please feel free to get in touch for a free call.