NSW Govt must now act on payroll tax debacle

Friday’s decision by the NSW Supreme Court to uphold the decision by Revenue NSW to charge Loan Market payroll tax retrospectively to 2012 sets a dangerous precedent for aggregators and other states, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White AM has accused Revenue NSW of a “blatant money grab” and has called on the NSW Government to finally intervene.

“To this point the government has taken a ‘wait and see approach’ while the legal action was underway.

“However now that the court has basically stated that the law was wrong but that they have to uphold it, it’s time for the government to fix the problem.”

Mr White said aggregators are working with the issue of payroll tax moving forward, but it’s unfair to go back 12 years retrospectively, particularly as aggregators were acting on high quality, independent advice.

“We must be clear that this decision applies only to the case at hand involving Loan Market, however my concern is the impact this may have on new entrants to the broking sector and the precedent for other states to attempt a similar money grab.”

He said the most reasonable approach by Revenue NSW would have been to help aggregators prepare for any change of interpretation of payroll tax eligibility and set the course for the future.

“But in this case they took a big stick approach and it’s difficult to see this as anything but an opportunity to use Loan Market to raise extra revenue.”

However while Loan Market is a large company, Mr White said the ramifications could impact small businesses.

“I will be talking to the NSW Premier and asking his government to draft whatever legislation is necessary to change law that led to this decision and protect small business,” he said.

“Both sides of politics must now come together and fix this mess.”

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