The Australian Virtual Assistants Association recognises that there are two types of ‘virtual assistants’ in this world. Often we’re referred to as the ‘western VAs’. The reality is that most VAs are self-employed professional business owner/operators. But there are many, mainly in Asian countries, who are employees of agencies. It is recognised that the Australian government has had challenges with people who claim to be contractors versus those who are employees in recent years. And so we feel it is important we can differentiate and ensure businesses here in Australia, who engage our services, know that we are not employees and definitely independent contractors.
Recently we’ve become aware that the 80/20 rule many Australian-based VAs have been referring to ‘went out the window’ in July 2013. In fact, when Kathie (our President) was recently speaking to Ken Phillips, Executive Director of Independent Contractors Australia, he shared that the rule was quite irrelevant and was a subtest of a subtest relating to PSI rules and income splitting back in 2002. It related to Personal Service Income and the tax laws of that time.
Ken advised that we really should be looking at what he called a Swinging Pendulum Test which has a list of 20 statements independent contractors can look towards as a guideline for ensuring that they are, indeed, independent contractors and not employees. This list covers things such as:
- how you operate as a business (VA),
- if you advertise for business,
- do you own your own equipment,
- are you responsible for you own work and any defects,
- how you manage the process for getting paid
- and even being responsible for your own leave and insurances.
There are quite a few other things too. Cost for joining ICA is only $55.00 and is worth investing to keep informed on what is relevant to you, as an independent business owner and contractor and how this relates to you within our taxation laws in Australia. The list does stipulate that it can only be used as a guide and is not intended to be treated as professional advice. It is always wise to speak to your own Accountant if in doubt about anything.
It is important that all Virtual Assistants here in Australia ensure they are getting good advice. Checking the ATO website when they’re aware of updates and also engaging the services of an Accountant who is well versed with small business operations. No-one should be operating a VA business without having an Accountant to guide them.
Thank you to Ken for his advice. Please note that Kathie is a board member of Independent Contractors Australia and you can read more about the board here.
The AVAA has put together a list based on both the ATO website list and the ICA list which is suitable for Virtual Assistants in Australia. A copy will be made available to all AVAA members very soon.
N.B. An article by Darren Cassidy is well worth reading too, with several points included. See here.