Accountants ruled to be liable for payroll tax penalties

Accountancy group, Chan and Naylor Australia Pty, has failed in its appeal against the NSW Chief Commissioner of State Revenue's finding that it was liable for more than $200,000 in payroll tax, penalty tax and interest for the period of 2009 to 2013.

The Chief Commission for State Revenue ruled that Chan and Naylor Australia Pty, as trustee for Chan & Naylor Trust stated that CN Australia and Chan and Naylor Pty Ltd constituted a group for NSW payroll tax purposes from 1 July 2008.

However, Chan and Naylor objected the grouping assessment, appealing to the NSW Civil and Administrative Tribunal.

Under tax legislation, "payroll tax is a tax on employers in respect of NSW wages paid to employees during each financial year," the Tribunal noted.

"If total wages paid by an employer during a financial year are below the statutory payroll tax threshold for that year, then no payroll tax is payable by that employer.

"If employers are part of a group for payroll tax purposes, then only a single threshold deduction applies to the whole group rather than each member of the group benefiting from a separate threshold deduction."

In its decision the Tribunal found that with regard to the material before it, the Chief Commissioner of State Revenue was correct in his decision with respect of the grouping of the applicants throughout the relevant period are confirmed and the revised assessments as to tax, interest and penalty tax are confirmed.

A directions hearing will be held on 4 February in respect of any costs application in this matter.

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Payroll tax is probably unconstitutional in so far as it falls on labour embodied in goods: .

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