Tax law stands alone for couriers

COURIERS have been classed as employees by a recent High Court decision but are not likely to fall foul of alienation of personal services income provisions.

The High Court last week upheld an appeal against a New South Wales Supreme Court decision in the Hollis v Vabu case.

Vabu trades as Crisis Couriers.

The case revolved around an incident in 1994 in which Team Couriers employee Gary Hollis was struck by a Crisis Couriers bicycle courier outside a building in Ultimo.

The impact resulted in an injury to Mr Hollis’s knee that required surgery and resulted in a 25 per cent permanent disability to the joint. He sued Vabu, claiming negligence.

But, in 1999, the New South Wales Supreme Court dis-allowed the claim because the bicycle courier was not an employee of Vabu and therefore it could not be liable for his negligent acts.

An Australian Tax Office spokeswoman said it was unlikely the High Court decision would affect couriers for tax purposes.

Jackson McDonald tax cons-ultant Graham Harrison said the High Court decision probably would not have much bearing on alienation provisions.

Mr Harrison said the tax law treatment of contractors was separate from other legal definitions.

Couriers, like other con-tractors, will soon have to satisfy the results test to see if they are undertaking a personal services business. This test will be part of the Government’s self-assess-ment regime.

To pass the test, contractors will have to show they have been contracted to produce a specified result, they are providing their tools of trade and that they bear commercial risk – including liabilities arising from defective work.

Mr Harrison said most owner-driver couriers would be able to satisfy this test because their payment usually relied on the successful completion of deliveries.

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