Finsure CEO Simon Bednar (pictured above) said by defending the assessments in the NSW Supreme Court, Finsure was standing up for single broker operators who would otherwise bear the brunt of the costs of the tax.
“If Revenue NSW is successful, payroll tax will be applicable to all aggregators on commissions paid to brokerages with less than two brokers,” Bednar said. “This could be the tip of the iceberg and have ramifications across the mortgage broking industry nationwide.”
“This payroll tax money grab impacts all mortgage aggregators in the market, not just Finsure.”
Bednar said Finsure was confident the Group could stop the payroll tax impost.
“Our opinion is that Finsure will be successful,” he said. “If this tax is successful, then the last thing Finsure or any other aggregator wants to do is pass on the costs of the tax to brokers.”
“But we don’t anticipate this will occur as we are of the opinion this payroll tax move is unlikely to succeed.”
The debate surrounding payroll tax and aggregators has been marinating for a while now.
In February 2023, Revenue NSW had alleged that aggregators are operating as the employer of their broker network and are therefore, liable to pay payroll tax.
As alluded to by Bednar, this could pose a significant threat to the industry and could lead to some aggregators closing their doors.
However, many industry leaders, associations, and experts do not agree with Revenue NSW’s assessment.
The MFAA’s longstanding position was that Revenue NSW had no legal basis to levy payroll tax on the industry.
On February 24, the association launched a campaign seeking a moratorium on any action against the NSW mortgage and finance broking industry by Revenue NSW until there was clarity on the rules and certainty for the industry.
During this time, FBAA managing director Peter White had also “unquestionably agreed” that aggregators should not be liable for payroll tax on their brokers’ commissions.
“The end outcome is brokers will be paid less, when we are in a market where they should be being paid more,” White had said.
On March 16, tax litigation specialist Jack Aquilina told Australian Broker’s sister publication MPA that Revenue NSW did not appear to understand the operational aspect of the aggregation sector, and that conversations were needed “across all levels of government”.
By March 27, Revenue NSW had agreed to listen to the concerns about bringing payroll tax to the mortgage and finance industry, confirming it would not start any new audits on aggregators.
This was shortly after Labor, led by Chris Minns, won the NSW state election, with MFAA CEO Anja Pannek welcoming Revenue NSW’s decision and the opportunity to resume constructive dialogue to resolve the payroll tax issue.
However, Aquilina urged aggregators and the industry to “remain focused” and “ensure they were prepared”.
In October, the MFAA reiterated its commitment to the issue, starting payroll tax was a key advocacy area raised by members.
“This new tax was being unfairly applied to our industry and would have significant impacts on the livelihood of individual brokers, and as payroll tax legislation is harmonised across most states it was essential that the industry take action,” Pannek told MPA.
Separately, at least one other aggregator, LMG, has launched a court appeal against Revenue NSW’s payroll tax while others, such as Mortgage Choice, have also voiced their concerns about the issue, welcoming Revenue NSW’s decision not start any new action to pursue aggregators for payroll tax.
