You are a Tax Director in the following situations: a) A client of the firm has enquired about how to treat the income o

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You are a Tax Director in the following situations:
a) A client of the firm has enquired about how to treat the
income of Oliver Martin and Erica Ferguson who both provide
services to AGL Limited. The client indicates that she is unsure of
the type of employment and how to account for the income tax for
each person. The client provided Tamika with the following
information:
Oliver Martin
Oliver Martin provides accounting services for the company. He
uses his own computer. He works from the company’s premises Monday
to Wednesday only. He is paid at the end of each month. To obtain
his payment he must provide the company with an invoice detailing
the days worked. He is paid a daily rate of $30,000 for 8 hours of
work. He determines his own time of work. Tasks are assigned to
Oliver by the Head of Reporting & Finance. He reports directly
to the Head of Reporting & Finance. Oliver is not entitled to
vacation leave, sick leave, and he does not a participate in the
company’s pension plan. There is no restriction on Oliver’s ability
to provide services to other persons.
Erica Ferguson
Erica is an on-call machine technician. She repairs the
company’s machines in the factory. She uses her own tools. For each
machine serviced a flat fee is paid monthly. Erica is also paid
separately for repairs. Each month she provides a report to the
Operation Manager for the work done as well as her invoice for
payment. One term in Erica’s contract indicates that she is
expected to dedicate all her time to AGL Limited. She is provided
with a lunch card which she uses to obtain lunch at the company’s
canteen. She also obtains medical and pension benefits.
Required
(i) Provide guidance to Tamika on the factors she should
consider in determining the type of employment.
(ii) Based on your own assessment advice on the type of
employment for each person, advise Tamika on the correct way she
should account for each person’s income tax.