Phyllis forgot to pay GST and now the ATO is looking for payment. Phyllis is not sure who is responsible for the GST and whether her husband Jim can be held responsible as a director of Clean Shine Pty Ltd. The answer depends on who entered into the service contract. Before entering into an ease agreement, both the company and the practitioner should agree on the fixed rate of royalty allocation. In facility agreements, the practitioner must generally maintain and maintain a high level of professional liability insurance (PII). It is not necessarily painful. However, many agreements require, because of the nature of the profession, that a practitioner still have to manage this insurance a few years after the end of the contract. It is important to check whether a practitioner is ready and able to maintain this level of II when he reaches the facility agreement. The practitioner is also often required to purchase and maintain workers` compensation insurance. They also need liability insurance (PLI). Entering into a service contract can be of benefit to both parties, but tax and compliance issues can arise if you are not careful.
Mario has dental surgery and has a free space that he wants another dentist, Phyllis, to have operated on. He doesn`t want to employ Phyllis, so they enter into a service contract. Instead of entering into a contract in its own name, Phyllis decided to enter into the service contract through the trust company of its family trustee (Clean Shine Pty Ltd). Phyllis and her husband Jim are the directors of the trust company, which receives the proceeds from the service contract and distributes it only to Phyllis. Moffet`s most recent case against Dental Corporation Pty Ltd  FCA 344 involved a dentist acting as an independent contractor under a service contract. In accordance with the service agreement, the services were provided by the dentist to the dental clinic in exchange for the renumeration. Granata explains: “This means that there are no leave rights or protection against unfair dismissal. It is a more flexible model; there is no structure in terms of compensation or how services are paid. An independent contractor has more flexibility, autonomy and control over his own services. The physician had entered into an agreement with the medical clinic, in which the physician provided services to his clients at the clinic and the clinic provided administrative services and facilities to the physician. The fees paid by the doctor`s clients were paid to the clinic on behalf of the physician.