Consulting for a spouse?

[vlakken]

In my ongoing endeavor to fill my pockets, I've been met with the challenge of Personal Services Income by that wiley character we call the Australian Taxation Office. Now, I consult for one business currently, from which I obtain 100% of my income. With the new PSI laws, in order to not be counted as a practical employee, I need to derive no more than 79% of my income from one source if I am paid a wage, like I am, as opposed to commission.

Now, it just so happens that in setting up my wife & mother in law's joint business (they'll be working as a Partnership) that I'm "consulting" for them really in the same way I do my current client. Does the ATO recognise that were I to charge their partnership for my services? I'm doing exactly what I do with my other client, and it's taking up my time to get them going, etc.

Your thoughts?

[Brendan]

If you charge them via your business, then yes it is an income and they are treated as a second client and you should let the ATO aware of it.

[vlakken]

Excellent. Exactly what I wanted to hear. Ta.