Planners avoid payroll tax headache
NSW-based financial planners will avoid the added burden of payroll tax due to an ‘imminent’ ruling by the NSW Office of State Revenue (OSR) that will recognise planners alongside insurance agents, exempting them from the state’s payroll tax contractor provisions.
According to theInvestment and Financial Services Association(IFSA), the decision to exempt planners from the tax is based on the way their businesses are structured and remuneration is obtained.
IFSA deputy chief executive Joanne Bloch says the association’s discussions with the NSW Government on the issue have been very positive, and she expects a resolution very soon that “has industry needs in mind”.
“They have been receptive to our representations and we are very optimistic about a positive outcome,” Bloch says.
The decision will follow a September 2002 report on payroll tax compliance, which recommended financial planners be exempted from the payroll tax contractor provisions.
The report was compiled by two independent professionals — consultant, Penny Le Couteur, and University of NSW faculty of law associate professor, Neil Warren.
Pending a decision on the recommendations, the OSR suspended all payroll tax audits of remuneration payments to advisers at the end of last year and now says it will not commence any new audits.
Bloch says that until now, financial planning businesses generally have not been paying the tax, as they have been treated like insurance agents, who historically have been exempt from the tax.
Bloch adds, however, that financial planning remained “an area of grey” for the NSW OSR.
The decision is expected to be a victory for theFinancial Planning Association, which targeted NSW in its drive for exemption from state payroll tax regimes because of the state-based report.
The payroll tax issue came to a head after the OSR issued tax assessments to dealer groups based on the assumption planners were direct employees of the dealer groups and not self-employed contractors, exposing the dealers to the payroll duties.
Recommended for you
Wealth managers have said they are experiencing difficulties in aligning their company’s in-house views with the ever-increasing needs of clients, according to MSCI.
The financial advice industry is experiencing a “champagne problem” regarding pricing, with advice firms seeing no need to cut their prices to remain competitive.
Marking a decade offering managed accounts in Australia, BlackRock has elaborated on the changes it has seen in their usage by financial advisers, with net client flows rising from 4 per cent to 25 per cent.
AZ NGA’s CEO has unpacked how its recent $345 million debt facility from Barings will accelerate its advice network’s growth ambitions, and allow its largest firms to access a greater source of funding.
