Supporting information for private rulings: Personal services income

This list outlines the documents and information we usually need to process private rulings about personal services income.

Send the following documents and information with your private ruling application form.

Personal services income

• An explanation of the services that you provide - a list of all your contracts for the income year and for each contract:
• the name of the client
• the name of the labour hire firm or similar organisation (if any) involved in the provision of your services
• the income received in that year
• the period covered by the contract
• if your services were provided as part of a team, a brief explanation of how the team operated.
• Copies of the main contracts for the provision of your services (including any contracts with labour hire firms or similar organisations).
• Details of any unusual circumstances that apply or applied to you in relation to your personal services income activities, the 80% rule and personal services business tests in the income year.
• The information required for the relevant personal services business test or personal services business determination:
• results test
• employment test
• business premises test
• unrelated clients test
• unrelated clients test met, but 80% rule not met because of unusual circumstances
• unusual circumstances preventing the unrelated clients test from being met
• unusual circumstances preventing other tests from being met.

Results test

• A sample of quotes (if any) provided to clients.
• A sample of consecutive invoices (at least four, if possible) or other documents (for example, time sheets) provided to your main clients.
• If you do not have written contracts/agreements with your client, provide the following information for the main contracts for the income year:
• the period covered by the contract/agreement and the contract price
• the specific outcome or result produced under the contract/arrangement
• the basis on which you are paid under the contract/agreement - for example, are you paid an hourly or daily rate and when are you paid (for example, weekly, fortnightly or at the end of a job)
• the basis of payments or instalments for work in progress (if any) - what happens with the progress payments if your work is faulty
• the circumstances under which your contract could be terminated before producing the specified outcome or result
• your entitlements on termination - are you entitled to be paid for services you have performed up until the time of termination?
• the tools and equipment that you provide in undertaking the contract
• details of how you rectify defective work
• whether you are entitled to invoice your client for the time spent and costs incurred for rectifying defects in your work
• details of your own liability and indemnity insurance.

Employment test

• The names of your apprentices (if any) and the period that you engaged them.
• For each of the contracts in which other individuals (including partners) and entities were engaged to perform the principal work, provide the:
• name of the client
• income received
• names of individuals and unrelated entities who worked on the contract, distinguishing between associates and others
• value of the principal work performed by the individuals and unrelated entities and an explanation of how that value was calculated together with details of records (for example, time sheets) maintained on work done
• details of the work the individuals or entities did to help you meet your contractual requirements.

Business premises test

• The date you started to maintain business premises.
• The period or periods that business premises were maintained in the income year.
• Whether you have continuously held premises while conducting activities which earn personal services income.
• Details of the premises, including the activities carried out there:
• a description of the nature and extent of any private use, and any other (non-PSI) business use of the premises
• a full description of the premises including, if possible, photographs and a floor plan
• evidence that you have exclusive use of the premises (for example, a lease agreement, or a certificate of title)
• evidence that the premises are physically separate from your or your associates' private premises
• evidence that the premises are physically separate from the private and business premises of clients and their associates.

Unrelated clients test (private ruling only)

• For each client in the application year:
• the name of the client
• whether the client is an associate of you or of another client
• a brief description of services provided
• an explanation of who provided the services
• the amount of income received
• the method by which the contract was obtained (for example, word-of-mouth, advertising, tender, recruitment agency or labour hire)
• the payer for the contract (for example, client or labour hire firm).

Unrelated clients test met but 80% rule not met because of unusual circumstances

• Provide a list of clients for the income year in question and (if not the first year of operation) for the two years prior to the 'unusual' year.
• For each client in your list, provide:
• a brief description of the services provided
• an explanation of who provided the services
• the amount of income received from that client contract
• the method by which the contract was obtained (for example, word-of-mouth, advertising, tender, recruitment agency or labour hire)
• the payer for the contract (for example, client or labour hire firm ).
• Description (preferably with evidence) of contract negotiations for the following year.
• A copy of the contracts for the unusual year.

Unusual circumstances preventing the unrelated clients test from being met

• Provide a list of clients for the income year in question and (if not the first year of operation) for the two years prior to the 'unusual' year.
• For each client in your list, provide:
• a brief description of the services provided
• an explanation of who provided the services
• the amount of income received from that client contract
• the method by which the contract was obtained (for example, word-of-mouth, advertising, tender, recruitment agency or labour hire)
• the payer for the contract (for example, client or labour hire firm).
• Description (preferably with evidence) of contract negotiations for the following year.
• A copy of the major contract for the unusual year.

Unusual circumstances preventing other tests from being met

• Evidence of how you met the relevant test in prior years.
• Evidence of how you will meet the test in subsequent years.

More information

For more information about applying for a Personal services business determination:

• Refer to Personal services business determination application (NAT 72465).
• phone us on 13 28 66.