Recording your income and expenses is essential to understanding what income goes through your business and why. You need to keep records explaining all transactions that relate to your tax affairs, including PSI.
Generally, you need to keep records of most transactions, in English, for 5 years. The 5 years starts from when you prepared or obtained the records, or completed the transactions (or acts they relate to), whichever is the later.
When working out if you receive PSI, you need to keep records that show:
- whether the income is PSI
- how you worked out if the PSI rules apply
- which expenses apply to any PSI received, and
- the deductions you can claim against the PSI.
If more than one individual is generating PSI, you need to keep records relating to each individual.
The types of records you may need to keep include:
- tax invoices
- time sheets submitted to the client or labour hire firm
- contracts with schedules
- diaries detailing what work was performed, when and for whom
- emails evidencing contract negotiation
- bank statements and receipts
- vehicle logbooks.
Personal services income
Steps | Progress | |||||||||||||||||||
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What is PSI? |
4 mins | |||||||||||||||||||
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Is the income PSI? |
5 mins | |||||||||||||||||||
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Income that is not PSI |
9 mins | |||||||||||||||||||
Whose PSI is it? |
7 mins | |||||||||||||||||||
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Working out if the PSI rules apply: self-assess as a personal service business (PSB) |
2 mins | |||||||||||||||||||
The 80% rule |
5 mins | |||||||||||||||||||
Results test |
8 mins | |||||||||||||||||||
Unrelated clients test |
5 mins | |||||||||||||||||||
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Employment test |
5 mins | |||||||||||||||||||
Business premises test |
7 mins | |||||||||||||||||||
Obtaining work through an agency |
5 mins | |||||||||||||||||||
Apply for a personal services business determination (PSBD) |
3 mins | |||||||||||||||||||
What to do when the PSI rules apply |
2 mins | |||||||||||||||||||
What to do when the PSI rules apply: claiming deductions |
11 mins | |||||||||||||||||||
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What to do when the PSI rules apply: how to attribute PSI |
8 mins | |||||||||||||||||||
What to do when the PSI rules apply: PAYG |
18 mins | |||||||||||||||||||
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What to do when the PSI rules apply: completing your tax return |
4 mins | |||||||||||||||||||
What to do if the PSI rules don’t apply |
3 mins | |||||||||||||||||||
Record keeping for PSI |
1 mins | |||||||||||||||||||
Help for PSI |
1 mins | |||||||||||||||||||
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Case study: instructions |
1 mins | |||||||||||||||||||
Case studies: sole trader |
11 mins | |||||||||||||||||||
Case studies: partnership |
12 mins | |||||||||||||||||||
Case studies: company |
12 mins | |||||||||||||||||||
Case studies: trust |
12 mins | |||||||||||||||||||
Related courses |
1 mins | |||||||||||||||||||
Course Feedback |
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