The Australian Tax Office has bowed to pressure from business groups, builders, couriers and accountants and will cut by half the paperwork faced by contractors who want to pay the lower company tax rate. The previous 12-page form has been cut to four pages. The new form, obtained by The Age, will be released next week. Instead of completing up to 70 questions, contractors seeking tax certainty will be asked 30 questions in simple language. Contractors had complained that Tax Office rules were onerous and penalised genuine companies.

The excessive paperwork became an issue during last month's Aston byelection. Treasurer Peter Costello said last month that contractors would be allowed to "self assess" their tax liability rather than undergoing a complex test to prove company status. The new forms are no longer compulsory but can be completed by contractors earning more than 80 per cent of their income from one source who seek Tax Office recognition of their status as a company.

The changes were yesterday welcomed by the Housing Industry Association, which had pressed the government for simpler rules. The association's managing director, Ron Silberberg, said he had been asked by the Tax Office to help design the new forms. "It's been halved, it's in plain language and it will be far more accessible to those people who seek or are required to submit an application for a personal services business determination," Dr Silberberg said.

A Tax Office spokeswoman said the forms would likely be released next week after being tested by industry groups. She said the office would hand down rulings on Friday further clarifying changes announced by Mr Costello. Meanwhile, about 100 courier drivers yesterday delivered letters to Prime Minister John Howard's Sydney residence, urging the government to change a draft tax ruling that couriers be charged income tax rather than the lower company tax rate. About 80 courier vans blocked the streets around Kirribilli House during the protest. Couriers are concerned that they may face increases in their tax bills of up to 20 per cent. The Transport Workers Union said this could amount to between $150 and $250 extra tax a week, or up to $10,000 a year.