Senate Standing Committee on Education and Employment interim report

On 14 October 2015, the Senate Standing Committee on Education and Employment tabled an interim report in relation to its inquiry on the impact of Australia's temporary work visa programs on the Australian labour market and on the temporary work visa holders. The Committee is due to deliver its final report in February 2016. 

Payroll Tax – Common Employee Grouping Provisions (NSW)

In Regis Mutual Management Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 213, the New South Wales Civil and Administrative Tribunal considered whether the Applicant should be grouped with Capricorn Society Ltd (‘CSL’) under section 71 of the Payroll Tax Act 2007 (ie groups arising from the use of common employees) as a result of a service agreement between CSL and the Applicant under which CSL was responsible for providing human resources (HR), accounting and information technology (IT) services to the Applicant. The Tribunal was also asked to consider whether the Chief Commissioner had acted correctly in denying the Applicant’s earlier de-grouping application under section 79 of the Payroll Tax Act 2007.

In a departure from the decisions of the Victorian Civil and Administrative Tribunal in Liquid Rock Constructions Pty Ltd v Commissioner of State Revenue (Taxation) [2011] VCAT 2164 and Bank of Queensland Limited v Commissioner of State Revenue [2013] VCAT 1966, the Tribunal appeared to apply a broader interpretation of sub-section 71(3). The Tribunal agreed with the Chief Commissioner that sub-section 71(3) does not “require that the employees be subject to the control of the Applicant”, instead focusing on whether the duties performed under the agreement were “for or in connection with the Applicant’s business”. Ultimately, the Tribunal was not satisfied there was any evidence that in carrying out their duties for CSL’s business by providing services to the Applicant, employees of CSL were not also performing duties for or in connection with the Applicant’s business.

In relation to the de-grouping issue, the Tribunal found that the Applicant had not discharged its onus of satisfying the Tribunal that the business of the Applicant was carried on independently of and was not connected with the business of each other group member. In reaching this decision, the relevant matters included the importance of the services provided by CSL to the Applicant’s business; the provision of start-up capital by CSL to the Applicant; delays in the signing of the service agreement without any impact on the provision of services by CSL; a group Workcover insurance policy covering both entities; and guarantees provided by CSL for the benefit of the Applicant’s business.

This case serves as important reminder that Administrative Tribunal decisions of one State will not necessarily be followed by other States. Taxpayers should maintain sufficient evidence to support their tax position and should consider requesting a private ruling from the Revenue authorities in the relevant States and Territories in relation to any positions that are not free from doubt.

NSW Jobs Action Plan Revenue Ruling – Applications for Registration

The New South Wales (NSW) Office of State Revenue (OSR) has released a new revenue Ruling explaining how the Chief Commissioner will exercise discretion in relation to retrospective applications to register for the Jobs Action Plan rebate scheme from 23 November 2015. This Ruling applies to taxpayers who fail to register a new position within 30 days of the relevant employment commencement date.

From 23 November 2015, the Chief Commissioner will only accept applications for late registration without justification if the application is made with OSR within 90 days after the employment to which the registration relates commenced. If the late registration is not made within 90 days, the Chief Commissioner will only accept the application if it appropriate to do so having regard to all relevant factors, including the purpose of the scheme, the reasons for the delay in applying for registration, and the length of the delay.

If your business has increased its NSW headcount since 1 July 2011 but has not yet registered for the Jobs Action Plan rebate, you should ensure that all retrospective registrations are submitted to the OSR on or before 22 November 2015 to ensure that your business does not miss out on being able to claim rebates that the business may otherwise have been entitled to receive.

Bill introduced to Parliament (Cth)

The Tax and Superannuation Laws Amendment (2015 Measures No 5) Bill 2015 has been introduced to the House of Representatives. Among other things, this Bill contains measures to limit the fringe benefits tax (FBT) concessions on salary packaged entertainment benefits by:

  • introducing a cap on the total amount of salary packaged entertainment benefits that certain employees can be provided that are exempt from or subject to FBT at concessional rates
  • removing the Reportable Fringe Benefits Amount reporting exclusion in respect of these benefits
  • removing access to elective valuation rules when valuing salary packaged entertainment benefits.

If passed, these changes will be applicable from 1 April 2016.

The ATO is in the process of conducting industryspecific webinars to provide more information in relation to SuperStream and taxpayers can register for these sessions through the ATO website.

Single Touch Payroll update

The ATO recently released an update on the status of Single Touch Payroll. Consultation with representatives from large businesses, industry and software developers has now been completed, with the key messages from this process being that:

  • there is general support for the real time reporting concept given the broader community benefits and potential future use of the data by other government agencies
  • most employers saw benefits of simplifying the process to bring on new employees
  • most businesses require a 12–18 month lead time for successful implementation
  • some participants believe Single Touch Payroll may increase the current burden on employers, due to more frequent reporting.

The ATO has advised that discussions are now continuing with software developers to explore design options for reporting payroll information.