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The NSW tax revenue office has confirmed in writing that it won’t commence any new aggregator audits on payroll tax.
Revenue NSW has confirmed that it will not commence any new audits connected to aggregators in regard to payroll tax.
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Revenue NSW has been seeking to retrospectively introduce a new tax on mortgage brokers — a payroll tax on commissions paid to mortgage and finance brokers.
According to the industry, the tax is not only irrelevant to broking but has no legal basis and could destroy the entire industry.
Indeed, Loan Market has already launched legal action to challenge Revenue NSW’s application of this payroll tax laws.
The industry had been holding multiple conversations with Revenue NSW and politicians to outline the impact of this new tax burden on industry and cease any new action until more clarity is had on the law.
The MFAA last month launched a Do Gooder campaign asking brokers to send politicians letters outlining their concerns on the matter and asking for a moratorium until there was more certainty for the industry.
While the NSW shadow finance minister, Labor MP Anoulack Chanthivong, had told the FBAA that he would be open to placing a moratorium on the issue until further stakeholder engagement had been held; there had been widespread frustration that no written confirmation had been made on the matter ahead of the state election on Saturday (25 March).
Action paused until court case has been resolved: Revenue NSW
However, the Mortgage & Finance Association of Australia (MFAA) revealed on Monday morning (27 March) that it had received confirmation from Revenue NSW that it woud not pursue any new action.
Revenue NSW has now confirmed this commitment to The Adviser, with a spokesperson stating: "Revenue NSW is in discussions with the Mortgage & Finance Association of Australia in relation to the uncertainty from their members ahead of an upcoming court case.
"Revenue NSW has paused any new payroll tax audits connected to mortgage aggregators until the court case process has been resolved."
MFAA chief executive Anja Pannek said she was now looking forward to working alongside the new government on matters affecting a significant industry for the state.
Ms Pannek commented: “With the election result now clear and the election campaign completed, we are pleased to have received written confirmation from Revenue NSW that no new action will be taken against aggregators.
“We held constructive meetings prior to the election where we firmly and respectfully communicated our concern to Revenue NSW and all sides of Government that the application of payroll tax threatens broker businesses, the financial stability of our industry, and choice and competition for NSW borrowers.
“In those meetings, we sought commitment from Labor, that should it form a new government, that it would suspend all activities against the broking sector in NSW by Revenue NSW, by way of a moratorium, until there is certainty for industry.
“In those meetings and publicly, NSW Labor clearly committed to engaging with industry to look at ways to ensure payroll tax requirements are transparent and clear.
“With the election campaign completed, we expect Premier-elect Minns and his Government to make good on those commitments.
“As such, we expect that the resolution of this issue will be a priority on the new government’s agenda.”
The MFAA CEO also thanked the thousands of brokers in NSW who engaged with their local MPs and candidates in the lead-up to the election regarding the matter.
“With payroll tax laws harmonised across most Australian states and territories, this is not just a NSW issue, it is a national issue,” Ms Pannek said.
“Our campaign has been incredibly successful in making so many voices heard in a pivotal time. Thousands of brokers put their hands up and made it known that this tax was harmful to the industry, their business and to their customers’ access to credit.
“Our industry looks after one another and we’re committed to protecting the interests of the broker industry alongside the new Government.”
The MFAA congratulated Premier Elect, Chris Minns MP, on his party’s success in the NSW state election on Saturday (25 March), welcoming the opportunity to quickly resume constructive dialogue to resolve the payroll tax issue.
The managing director of the Finance Brokers Association of Australia (FBAA), Peter White, said he also looked forward to Revenue NSW formally engaging industry on the payroll tax matter, "as it is the outcome we all wanted and we all have been and are lobbying for".
Mr White said: "It’s important to acknowledge something like this is the work of many, many industry people and the industry’s great brokers who have been engaging on this, and our thanks go to everyone for doing so.
"Once Revenue NSW puts out something formally to engage on this we, with industry, look forward to speaking with them."
Mr White said he had also sent a congratulatory text to the new Premier Elect Chris Minns wishing him and his team "all the best".
The FBAA head said he had also emailed the primary Minister for this payroll tax matter "with a similar message and thanking him and his team for their engagement on this and re-acknowledging the need to ensure we formally move this matter forward as a priority for our industry".
[Related: Industry seeks written confirmation on payroll tax moratorium]
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