In a letter to Synchron chair Michael Harrison – who has been a longstanding advocate of payroll tax reform for financial services providers – Mr O’Brien makes clear his government is not entertaining the suggestion of a policy change on the issue.
“The current provisions of the payroll tax law remain appropriate,” Mr O’Brien wrote. “I note that no other jurisdiction has accepted your proposal to provide a specific payroll tax exemption for certain financial planners.”
The Victorian treasurer directed Mr Harrison to the federal government, which it says is more appropriately placed to respond to concerns about the effect of “Commonwealth Government regulation of financial planners”.
The letter follows a submission to the FSI from Mr Harrison which argued that current state legislation poses a “double taxation” threat to licensees.
“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,” Mr Harrison wrote.
“Recent examples suggest that the key exemption available for financial advisers is one where, if the financial adviser employs a minimum number of other staff, then the revenue paid to them via the licensee will be exempt from payroll tax assessment.”
Commenting on the letter from the Victorian treasurer, AIOFP executive director Peter Johnston described the payroll tax status quo as a “significant issue that will cause considerable pain to the larger practices unless we do something about it”.
I agree entirely. Is this another attempt to put financial planners and insurance brokers out of business by adding more red tape and costs to their businesses. No wonder we currently have a high unemployment rate
Advisers are provided with professional services from Licensees so how does that make them employees of the Licensee. An employee provides a service to the client and is remunerated appropriately. Advisers are not paid without an ABN, once again how does the State think it should charge a Licensee a Payroll tax? The Licensee does not pay SGC, sick pays, annual leave or pay for rent of their offices. Advisers pay for their own tools of trade, purchase software and pay for training. They control their own work days, pay goods and services tax and are totally independent from the Licensee, so how can they possibly be regarded as employees. This is a cash grab by State Government attempting to rely on an unintended consequence of the FSR (ie Advisers have to be paid via Licensees) to boost their coffers at the expense of small business in Australia. Make this go away – it’s a further insult to the professionals in this industry.
Ridiculous. Just money grabbing.