11th June 2015
McGrath Real Estate Agents who were issued with an assessment of over $6m by NSW Office of State Revenue have settled the OSR’s claim for payroll tax, interest and penalty tax.
The OSR alleged McGraths were liable for payroll tax on commission payments received by “independent” agents who were contracted to them from 1st July 2007 to 30th June 2012.
It is common practice in the industry for better performing agents to enter into contract arrangements with agents who work under the company’s banner.
These arrangements often include the agent operating under a company set up but there are cases where the Courts will look behind the documentation to work out the true nature of the relationship. In this case the NSW OSR alleged that the agents came within the definition of “employees” under the Payroll Tax Act (NSW).
Under the Payroll Tax legislation which has been harmonised throughout all Australian States and Territories “wages” can include commission payments.
Tobin Partners spoke to McGraths’ CFO Paul Hauenschild yesterday who said the settlement terms were confidential.
If you would like to know more, or to discuss how to minimise the risk of the same thing happening to you, give us a call 07 3260 5189.
