TAXES AND DUTIES — Payroll tax — Liability — Employment agent — Where plaintiff is part of a group of companies that conducts a commercial cleaning business — Where plaintiff is the designated group employer under s 80 of the Payroll Tax Act 2007 (NSW) — Where the main entity in the group (MAPL) entered into contracts with retail, logistics and healthcare clients for the provision of cleaning services — Where another group entity (DCPL) entered into contracts with corporate contractors who supplied workers to perform cleaning services at the clients’ premises — Whether assessments were excessive — Whether contracts with MAPL and/or DCPL were ‘employment agency contracts’ for the purposes of s 37 of the Payroll Tax Act — Whether cleaning services were provided ‘in and for’ the conduct of the clients’ businesses — Whether all amounts paid to corporate contractors are taken to be wages by reason of s 40(1)(a) of the Payroll Tax Act
TAXES AND DUTIES — Payroll tax — Assessment — Interest — Whether assessment of interest should be revoked or reduced
TAXES AND DUTIES — Payroll tax — Assessment — Penalty tax — Whether assessment of penalty tax should be revoked or reduced
Quick Take
1Contracts under which a cleaning services provider procures cleaners to perform routine, ongoing cleaning at a client's business premises — closely tailored to the client's operational requirements — are employment agency contracts under s 37 of the Payroll Tax Act 2007 (NSW), notwithstanding that the provider exercises significant control over the cleaners, designs the cleaning systems, and adds substantial value through expertise, technology and management.
2Under s 40(1)(a) of the Payroll Tax Act 2007 (NSW), the entire amount paid to a corporate contractor (including the contractor's profit margin and overhead costs) is deemed to be wages; the words 'in relation to' expand the reach of deemed wages beyond amounts actually paid to individual workers, following HRC Hotel Services and Bayton Cleaning.
3Where one group entity contracts with third-party clients and a related group entity procures workers from corporate contractors to fulfil those client contracts, the related entity is an employment agent and the first entity is its 'client' within s 37, following E Group (No 2); this holds even where the procuring entity charges no profit margin and acts at the direction of the contracting entity.
