Aussie tech worker payroll scheme operators found guilty of tax fraud Three of the principals of an Australian scheme that offered free payroll services to tech contractors have been found guilty of conspiring to defraud the Commonwealth and conspiring to deal with the proceeds of crime. Organizations that hire contractors generally do so because they don't want permanent staff on the books. …
We have this in the UK after IR35 changes. Thousands of fake umbrella companies sprung up that were not paying taxes on workers' behalf or used different loopholes to unlawfully reduce the amount they paid.
Also look into Loan Charge.
In the UK, however, the lazy tax man is rather going after the workers who don't have money to defend themselves and fraudsters can enjoy their riches.
You missed the use of offshore arrangements by the umbrella operators, which were wholly legal because the uk resident/employee wasn’t a director of the offshore company that employed them.
I’m a little surprised Plutus Payroll weren’t availing themselves of the benefits of offshoring; or does Oz have laws prohibiting offshore arrangements?
"In Australia, a market has therefore sprung up for agencies that put contractors on the payroll as employees, pay their taxes and make their compulsory retirement savings payments. Contractors usually pay a point or three of their incomes for those services."
Well done, we've just exported IR35. Interesting that the market rather than legislation has driven this in AUS though. In the old days we paid accountants to provide payroll services but we didn't become their employees, and the fees were a lot less than 1% of salary (let alone turnover)
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