Payroll tax reform unites advice lobbyists
As the Victorian government announces a payroll tax rate cut, the financial advice associations are united in calling for policy changes to exempt authorised representatives.
In handing down the state Budget on Monday, Victorian premier Dennis Napthine and Treasurer Michael O’Brien announced measures to cut the rate of payroll tax for businesses with an annual payroll between $4.7 million and $26.7 million.
The Victorian government’s decision has reinvigorated the issue of payroll tax reform for financial planning firms, which has been a longstanding sore point among the industry associations and dealer group executives for decades.
FPA chief executive Mark Rantall told ifa yesterday that payroll tax may well become a “major issue for franchised organisations operating under a licensee arrangement” and pledged that the FPA will be fighting “vigorously” for reform.
“We realise that state governments are seeking to raise as much revenue as they can… but we don’t believe there is a justification in charging payroll tax to those people running a legitimate business,” Mr Rantall said.
The AIOFP has also been vocal on the issue, forwarding a submission – seen by ifa – to the parliamentary committee now overseeing FOFA which calls for the reinstatement of a previous carve-out for financial planning licensee businesses enacted in New South Wales.
“Whilst we applaud the Napthine government for promising to reduce payroll tax for business, we urge them to go one step further,” the AIOFP’s Peter Johnston told ifa.
“Over the past five years the Victorian State Revenue Office has been trying to classify independent contractors of financial advice businesses as employees and retrospectively impose payroll tax,” he added.
“This has enormous implications for every business that contracts independent small businesses to distribute product, not just the financial services industry.”
In its submission to the Financial System Inquiry, the AFA also took up the mantle of payroll tax reform, calling for “national action to ensure that self-employed financial advisers are exempt from the state-based payroll tax regimes”.
“In recent years there have been a number of cases where state revenue offices have looked at financial advice licensees with a view to identifying payroll tax liabilities,” states AFA chief executive Brad Fox in the submission.
“The current situation has the potential to financially destroy some licensees, particularly those that are independent of institutional ownership.”
ifa understands there are a number of dealer groups currently locked in dispute and/or negotiation with the Victorian State Revenue Office over payroll tax issues.
Intrafund advice trending towards robo: Deloitte
Superannuation funds are increasingly looking towards offering limited advice an...
Super funds responsibly investing outshine peers: RIAA
Australian superannuation funds engaging in responsible investment are outperfor...
Advisers put on notice by ASIC around timeshare schemes
The corporate regulator has highlighted the role of advisers in selling timeshar...