Reply To: Personal income tax-voluntary?

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Private Foundation is the only way to go tax free.

We have been operating a PF for 2 years. My previous employer was happy for me to change to contract (the company continues now to contract with the PF for services). Hubby’s company was very happy to change to contract as it meant no payroll tax for them (plus the boss had his own PF).

If you have a good understanding of the strawman and the line that needs to be drawn in the sand, then I suggest asking your employer if they are willing for you to go on contract. You negotiate an hourly rate or annual salary including super, or a weekly/monthly amount (whatever their payroll frequency is). Then you volunteer to the PF and the PF invoices the company. There is no GST as the PF is not registered for an ABN. There is a form that you supply the company with the first invoice from the PF that will satisfy their needs if the ATO was to audit them. This is a form from the ATO itself. And then if the ATO comes knocking on your door, you tell them to go away as the foundation is private.

Operate in the Private have this down pat. I spoke with a friend of a friend who had a PF for 3 years at the time, and his foundation offered trade services. The TF just provided the ATO form (Supplier Statement) with each first invoice. Never had a problem.

If your company records time on projects that you currently work on, then that time keeping system doesn’t change. When they run payroll, they simply negate (zero out) the hourly rate or the cost (however they record it). That way they can keep track of your hours, but not run you through payroll. As there is a zero amount, nothing in your name goes to Single Touch Payroll reporting with the ATO.

The ATO has an article on how bad or illegal PF’s are… which you would expect. They are wanting to discourage the people who do not understand what it is. But to combat that … think … why does the ATO have a form that allows an entity to be self-assessable for tax?????????? It is so those in the know can use the door themselves.

Private is private. It means no-one has any right to information about it.

As a PF is an entity all of its own, you will need to think up a name for the foundation (the use of the word ‘foundation’ is NOT required) and then get an email address for it. Proton Mail appears to be more secure that the standard Gmail etc. You can activate the proton mail short email feature so it appears like this: [foundation name] @
Then the PF invoices are emailed from the foundation’s own account. Keep it separate from your personal stuff.

I suggest reading the FAQ that Operate in the Private provide once you contact them. If you start up a PF, there is different terminology to use. So take the time to research and chat to these guys so you are 100% sure on what you are doing. In the private, it is you standing your ground, on your own. So YOU need be the one to draw that line in the sand.