After the amnesty comes a tax sweep of industries

THE Office of State Revenue has experienced a last minute rush by employers accepting its partial payroll tax amnesty.

By early this week, the office had received approximately 150 voluntary declarations from employers, who will now be liable for payroll tax on contractor payments where an employer-employee relationship existed.

The office had processed 110 declarations and assessed a total payroll tax bill of about  $2 million.

The amount of revenue raised through the amnesty falls a long way short of the $10 million in additional revenue the Western Australian Government expects each year from its payroll tax crackdown.

It implies that many other employers can expect a visit from the Office of State Revenue, which has already drawn up a list of 15 industries it plans to target after the amnesty expires on June 30.

The aim of the amnesty was to resolve uncertainty over the status of many contractors.


Genuine contractors are not subject to payroll tax, however, the Office of State Revenue has calculated that many contractors should be treated as employees for payroll tax purposes.

RSM Bird Cameron director Rami Brass said several of his clients had lodged voluntary declarations “out of fear”.

“They believe they are employing genuine contractors but State Revenue might decide they aren’t,” he said.

“They are not prepared, from a practical point of view, to dispute the issue.”

Employers who accept the partial amnesty will still have to make payroll tax payments for 1999-2000 onwards.

In contrast, employers who fail to take up the amnesty will leave themselves liable to payroll tax on five previous financial years and the current year, plus the added burden of penalties.

The Office of State Revenue has formed a team of officers that will commence work on the contractor audits next month.

The hit list includes building, construction and concreting services; consultant engineering services; motor vehicle repairs and panel beaters; real estate agents and valuers; and vegetable growers.

Other industries may still be affected by the Office of State Revenue’s routine audit program, which will involve visits to around 1,000 employers over the next 12 months.

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