The clampdown by revenue authorities on investigating medical, dental, optometry and other allied clinics is anticipated to continue, with the High Court refusing to grant special leave to appeal the Victorian Court of Appeal’s decision in the Optical Superstore case.

We have previously discussed the Victorian Court of Appeal’s decision and Victorian Supreme Court decision. The decision by the Victorian Court of Appeal has raised concerns as the payroll tax provisions were interpreted broadly such that payroll tax was triggered on amounts optometrists derived themselves (which the Optical Superstore entity held on trust for them). In simple terms, payroll tax was triggered on their money being paid to them (via the trust).

There are concerns that this decision could potentially have wide ranging effects to situations where genuine payments are made through intermediaries (such as a real estate’s commission from a vendor’s solicitor’s trust account, or an accountant paying legal fees as disbursements for their client).

This case is a stark reminder to all taxpayers, and their advisors, of how payroll tax is being implemented in an increasingly broad way.

Careful consideration of employment practices and business structuring should be made to ensure taxpayers have not triggered any unintended payroll tax liabilities.

To discuss this further or for more information please contact:

Denise Tan
Senior Associate
T +61 3 9611 0160 | M +61 438 714 965
E: dtan@sladen.com.au

Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E: pbroderick@sladen.com.au

Laura Spencer
Senior Associate
T +61 3 9611 0110
lspencer@sladen.com.au