I sometimes do some consulting work that is personal services. I usually provide an estimate based on an approximate number of hours to do the work. In the event that the work was harder than I anticipated, I bill the client for a few more hours. Similarly, if it's a bit easier than I anticipated, I bill them for slightly fewer hours. Usually, my estimate is very close. Does this still meet the results test? Perhaps to be safe, I should change to just making firm quotes not based on time?
i would suggest you would need to base your invoice on a task, not the 'time' taken to complete the task. if you put in your quote/invoice X number of hours at $Y per hour, that wouldn't pass the results test. you would need to say $Y dollars to complete the following task. i understand what you are thinking, and i do the same. I work out the cost of the task based on how long it will take, but your quote/invoice shouldn't say that. derek
Whilst accounting income is generally PSI, you will not be subject to the PSI rules. Quite common you are being paid to acheive a result, and you are earning your income from multiple sources
What do you class someone who does earth moving? Psi or not? All you’re doing is using your skills to operate machinery to make money. You’re not selling anything physical.
if you own the machine and your invoice includes the machine hire and labour, that is not PSI. However, if you don't own the machine and just 'turn up' and work someone elses' machine, that would be PSI. derek
![ROSÉ (로제) - number one girl [더 시즌즈-이영지의 레인보우] | KBS 241129 방송](http://i.ytimg.com/vi/A9oByH9Ci24/mqdefault.jpg)
I sometimes do some consulting work that is personal services. I usually provide an estimate based on an approximate number of hours to do the work. In the event that the work was harder than I anticipated, I bill the client for a few more hours. Similarly, if it's a bit easier than I anticipated, I bill them for slightly fewer hours. Usually, my estimate is very close. Does this still meet the results test? Perhaps to be safe, I should change to just making firm quotes not based on time?
i would suggest you would need to base your invoice on a task, not the 'time' taken to complete the task. if you put in your quote/invoice X number of hours at $Y per hour, that wouldn't pass the results test. you would need to say $Y dollars to complete the following task.
i understand what you are thinking, and i do the same. I work out the cost of the task based on how long it will take, but your quote/invoice shouldn't say that. derek
@TwelveAccounting thanks Derek, very helpful as always!
There are many accountants that do not, or do not want to know these rules. In fact many accountants are subject to PSI rules alone.
Whilst accounting income is generally PSI, you will not be subject to the PSI rules. Quite common you are being paid to acheive a result, and you are earning your income from multiple sources
What do you class someone who does earth moving? Psi or not? All you’re doing is using your skills to operate machinery to make money. You’re not selling anything physical.
if you own the machine and your invoice includes the machine hire and labour, that is not PSI. However, if you don't own the machine and just 'turn up' and work someone elses' machine, that would be PSI. derek