e-Revenue Queensland issue 10 November 2008

Pay-roll tax applies to wages paid or payable by an employer to an employee and to certain other amounts.  Payments to a contractor can be liable to pay-roll tax if the contractor is an employee and the contractor payments are therefore wages.

To determine if a contractor is actually an employee, common law employment tests apply.  To assist employers, OSR has issued Revenue Ruling Pay-roll Tax - 3.2 The Master/Servant Relationship. The ruling sets out the relevant matters in determining whether a contract is one of employment.

The penalty amnesty will provide employers with an opportunity to bring their pay-roll tax affairs up to date in relation to contractor payments, and will apply to payments made by an employer to contractors from 1 July 2005 to 30 June 2008 which are wages under the Pay-roll Tax Act 1971.

Information is available on the pay-roll tax penalty amnesty section of the OSR website to assist employers to clarify the correct status of payments to their contractors.

The benefits of making a voluntary disclosure under this amnesty are:

• no penalty tax will be imposed in relation to the contractor payments
• the rate of unpaid tax interest will be halved in relation to the contractor payments and
• only the previous three financial years will be reviewed.

OSR’s Investigation Division will be conducting audits relating to contractor payments at the close of the amnesty period, and the normal penalty and interest arrangements will apply from this time.  The audits will relate to five financial years, rather than the three financial years reviewed under the amnesty arrangements.

Employers are encouraged to visit the website to ensure they comply with the legislation.  An educational visit can be arranged during the amnesty period to discuss the application of the legislation with individual employers.

For more information on the pay-roll tax penalty amnesty:

• view OSR’s Pay-roll Tax Penalty Amnesty information sheet
• visit the Pay-roll Tax Penalty Amnesty section of the OSR website
• refer to Revenue Ruling Pay-roll Tax - 3.2 The Master/Servant Relationship
• refer to Revenue Ruling TAA - 1.2 Remission of Unpaid Tax Interest
• refer to Revenue Ruling TAA – 2.3 Penalty Tax 
• contact our Client Contact Centre on 1300 300 734.

These visits support new duty self assessors by providing an overview of the lodgement process, registration obligations and demonstrations on Duties Online.

Once a new self assessor registers, they will be contacted by OSR to organise an Assistance Program visit.

The Assistance Program visit covers:

Duties Online training
using online calculators
the range of transactions available for self assessment
entering transactions and lodging returns
an explanation of self assessor obligations
an explanation of audit/record keeping requirements.
If you would like to find out more about OSR’s new Self Assessor Assistance Program, please email client.support@osr.treasury.qld.gov.au 

OSR will be launching the new online training program in the coming months to help clients improve their knowledge of payroll tax and duties.

Each interactive training module will include an educational component, a voluntary testing component and an activity to help determine the user’s level of understanding.

With user testing currently underway, clients are invited to participate by emailing their interest to client.support@osr.treasury.qld.gov.au

More information about OSR’s e-learning initiatives including the launch date will be published in next month’s edition of e-Revenue Queensland