Bridges victorious in payroll dispute

Bridges Financial Services has won its long-running payroll tax dispute with the Western Australian Government, escaping an almost $500,000 tax bill in a decision that will come as a relief to other dealer groups.

The Western Australian Office of State Revenue (WA OSR) informed Bridges of its decision to scrap the $496,289.97 payroll tax assessment on Friday last week, bringing to an end a dispute that dates back to 1997.

The WA OSR had previously argued that Bridges planners were direct employees of the dealer group, rather than independent practitioners, meaning Bridges was liable to pay payroll tax on fees and commissions paid to advisers.

The decision to reverse this position will come as a reprieve for other dealer groups operating in WA, which may have had to face similar assessments if the verdict had gone against Bridges.

Bridges chief executive Alex Hutchison heralded the decision as a victory for the financial planning industry in a statement today.

“We welcome the decision by the WA OSR that recognises that Bridges planners are not employees and are in fact considered to be independent businesses,” he said.

“As a result of this development, Bridges will have its assessments of pay-roll tax for all periods from January 5, 1997 onwards cancelled and its pay-roll tax registration will also be cancelled.”

However, Bridges is still fighting against a payroll tax liability for its advisers in NSW. The dealer group will go to court today to argue against a claim similar to that in WA which has been levied by the NSW Office of State Revenue.

Peter Bobbin, Financial Services Taxation Partner from the Argyle Partnership, who is representing Bridges in the matter, said today the WA decision was a victory for common sense.