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PSI "unrelated clients test" through word-of-mouth

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Can anyone clarify question 2 of the "unrelated clients test" for the PSI/personal service income guidance?

 

In the information here: https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/Personal_services_income_guide.pdf it states

"Question 2: Does your business provide services as a direct result of making offers or invitations (such as advertising) to the public?
This means there must be a definite connection between the offer to the public and the engagement for the work. Making offers to the public includes advertising in a newspaper or business directory, maintaining a website, and word-of-mouth referrals."

However, in the online tool - https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=PSI&anchor=PSI#PSI/questions - if I state "word of mouth", "website" and "advertising" (LinkedIn profile plus website), it then specifically asks if clients were obtained through the website and advertising, seemingly excluding word of mouth.

If the current set of clients were:

* all found through building a professional network and reputation in the sector,
* no agencies/labor agencies ever involved
* found as a result of pitching services to them directly
* likely reviewed the website/LinkedIn, but the initial connection was not from them cold contacting through these

Can anyone clarify how that would sit within this aspect of the PSI rules? Thank you

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ATO Certified Response

Community Moderator

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Hi @bobby34 

 

Word of mouth referrals do not generally satisfy the requirements of the unrelated clients test.  It is only in situations where your skills and experience apply to a niche or specialised industry where the potential pool of clients is very small that word of mouth referrals may satisfy the test.  If you are uncertain whether you meet the unrelated clients test, you can apply to the Commissioner for a private ruling

 

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Community Moderator

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Hi @bobby34 

 

Thanks for letting us know about this, we will do some research and let you know.

Most helpful response

ATO Certified Response

Community Moderator

Replies 0

Hi @bobby34 

 

Word of mouth referrals do not generally satisfy the requirements of the unrelated clients test.  It is only in situations where your skills and experience apply to a niche or specialised industry where the potential pool of clients is very small that word of mouth referrals may satisfy the test.  If you are uncertain whether you meet the unrelated clients test, you can apply to the Commissioner for a private ruling