Don't Help Your Neighbour

A recent tribunal decision resulted in a builder being taxed on monies he claimed were not profits.

The builder had suffered a back injury and was now in receipt of a disability pension.  He claimed that he was helping his neighbour supervise a renovation and he was helping out as a favour for no reward.  The presumption is that he did not want any payment for reward, because it would impact on his Centrelink entitlements.

The neighbour paid him over $100,000 (some cash), but he could not prove what he had spent on materials or subcontractors.

He said that everything was spent.

However, because he did not provide any reliable evidence, he was unable to discharge his onus of proving that the inclusion of the profit was unfair.  In addition he admitted to providing bogus invoices to the neighbour to hide gambling losses.

If his story was true, then the result is arguably unfair, but if dealing in cash transactions, do not expect the Australian Taxation Office to be conciliatory or fair and reasonable!  

< back to Latest News