Changes to Jobs Action Plan rebate (FY16-17 New South Wales State Budget)
The 2016-17 New South Wales (NSW) Budget was handed down by the Treasurer on 21 June 2016 and included proposed amendments to the Payroll Tax Rebate Scheme (Jobs Action Plan) Act 2011. Under the proposed amendments, new jobs commencing on or after 31 July 2016, will only be eligible for the rebate if the employer’s full-time equivalent (FTE) employee number, prior to the job, is at or below 50 FTE. New positions created prior to 31 July 2016 who have anniversaries that fall after that date will still be eligible for the rebate.
The payroll tax rebate, for employers who are still eligible, for new jobs created after 31 July 2016 has increased from $3,000 to $4,000 for the second year of employment.
FY16-17 Australian Capital Territory (ACT) State Budget
The 2016-17 ACT Budget, delivered on 7 June 2016, was included an increase in the tax-free threshold for payroll tax from $1.85m to $2.0m, effective from 1 July 2016.
FY16-17 Queensland State Budget
The 2016-17 Queensland Budget was handed down on 14 June 2016. The Government announced in the Budget Papers that there will be an increase in payroll tax compliance activity from 1 July 2016, and, in particular, compliance for taxpayers incorrectly claiming to be not-for-profit organisations for the purposes of avoiding tax.
Payroll Tax – De-grouping (NSW)
In Eastside Veterinary Emergency & Specialists Pty Ltd v Chief Commissioner of State Revenue  NSWCATAD 104 the issue of de-grouping was once again brought before the NSW Civil and Administrative Tribunal. The case centred on whether the Chief Commissioner had acted correctly in deciding not to exercise discretion to de-group two neighbouring veterinary practices under section 79 of the Payroll Tax Act 2007.
Ultimately, the Tribunal confirmed the decision of the Chief Commissioner of State Revenue not to exercise his discretion to de-group the two veterinary practices for payroll tax purposes, finding 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 Rose Bay Veterinary Hospital Pty Ltd (‘Rose Bay Veterinary’).
This was despite submissions by the Applicant that the two practices performed entirely separate veterinary services (i.e. general and specialist), as only a small proportion of Rose Bay Veterinary’s income came from patients referred by the Applicant and the day-to-day control of each practice resided with different people, despite the entities sharing common directors.
In reaching its decision, the Tribunal considered that the relevant matters included the lack of independent evidence provided as to the nature of each business, the sharing of services and personnel between the two businesses, the use of the same registered address with ASIC, the use of the same postal and business address on the income tax returns of both entities and the provision of security by one of the common directors as a guarantor for the lease of the premises occupied by each business.
This case serves as a reminder that the decision to de-group for payroll tax purposes should not be taken lightly. As the onus of proof rests with the taxpayer, in order to be successful with your degrouping application, you must ensure that you have sufficient evidence to substantiate the position that the relevant business is carried on independently of, and is not connected with, the business conducted by any other member of the group.
Revenue Ruling: Workers’ Compensation Payments (South Australia)
RevenueSA has issued Revenue Ruling PTA015 [V2] to clarify how workers’ compensation payments are treated for payroll tax purposes. The ruling is effective from 14 June 2016 and replaces PTA015.
Payments of compensation made in accordance with the Return to Work Act 2014 are not subject to payroll tax. This is the case whether or not the payment to the worker is made by the employer or the insurer. However, compensation paid to incapacitated workers, in excess of the amount prescribed by the Return to Work Act 2014 (i.e. ‘make-up pay’) will be subject to payroll tax.
SuperStream Deadline for Small Businesses
The ATO has issued a reminder to small businesses that 30 June 2016 is the deadline for those employers not already using SuperStream. Solutions to ensure compliance with SuperStream include upgrading your payroll software, using a super fund’s online system, or using a clearing house. Businesses with an annual aggregated turnover of $2 million or less, and 19 or fewer employees may use the ATO’s Small Business Superannuation Clearing House at no cost.
To further support those businesses that need more time to implement SuperStream by 30 June 2016, the ATO has announced it will provide compliance flexibility until 28 October 2016.
2017 FBT Rates and Thresholds
The ATO has released a number of new Tax Determinations confirming the relevant rates and thresholds applying to the FBT year ending 31 March 2017, including reasonable food component figures and the benchmark interest rate. These rates and thresholds can be found in TD 2016/1 – TD 2016/5 and TD 2016/7.