Compass Group Education Hospitality Services Pty Ltd v Commissioner of State Revenue

Case [2020] QSC 184

SUPREME COURT OF QUEENSLAND

CITATION:

Compass Group Education Hospitality Services Pty Ltd & Anor v Commissioner of State Revenue [2020] QSC 184

PARTIES:

COMPASS GROUP EDUCATION HOSPITALITY SERVICES PTY LTD

ABN 60 129 203 998

(first appellant)

COMPASS GROUP HEALTHCARE HOSPITALITY SERVICES PTY LTD
ABN 79 114 320 615

(second appellant)

v

COMMISSIONER OF STATE REVENUE
(respondent)

FILE NO:

BS 1026 of 2019

DIVISION:

Trial Division

DELIVERED ON:

24 June 2020

DELIVERED AT:

Brisbane

HEARING DATE:

2 March 2020

JUDGE:

Holmes CJ

ORDER:

The appeal is disallowed.

CATCHWORDS:

TAXES AND DUTIES – PAYROLL TAX – OBJECTIONS, APPEALS AND REVIEWS – where the appellants employed workers to perform services which the appellants contracted to provide to their clients – where the appellants objected to the respondent’s assessment of payroll tax on payments made to the appellants’ employees – where the respondent disallowed the objection – where the appellants appeal that decision pursuant to s 69 of the Taxation Administration Act 2001 – where the appellants argue that they procured the services of their employees for their clients under agreements which met the definition of ‘employment agency contract’ in s 13G(1) in Div 1B of Pt 2 of the Payroll Tax Act 1971 – where the appellants argue that because their clients were exempt from payroll tax, wages paid to their employees for providing services to their clients were not subject to payroll tax, by virtue of s 13J(2) of that Act – where the respondent argues that s 13G and s 13J do not apply to the appellants because they are common law employers or, alternatively, because the appellants did not ‘procure’ the services of their employees but instead contracted to provide the services themselves through their employees – whether the appellants’ agreements with their clients and employees meet the definition of ‘employment agency contract’ in s 13G(1) – whether Div 1B of Pt 2 of the Payroll Tax Act applies to common law employers – whether the appellants are entitled to be relieved from payroll tax liability under s 13J(2)

Payroll Tax Act 1971 (Qld), s 9(1)(a), s 12, s 13G, s 13H, s 13I, s 13J, s 14(2)

Pay-roll Tax Act 1971 (NSW), s 3C

Payroll Tax Act 2007 (NSW), s 36A, s 37, s 38, s 39, s 40

Accident Compensation Commission v Odco Pty Ltd (1990) 95 ALR 641; [1990] HCA 43, cited

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41, applied

Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue (2005) 222 ALR 599; [2005] NSWSC 788, cited

CXC Consulting Pty Ltd v Commissioner of State Revenue (2013) 96 ATR 796; [2013] VSC 492, considered

Drake Personnel Ltd v Commissioner of State Revenue (Vic) (1998) 40 ATR 304, referred to

Drake Personnel Ltd v Commissioner of State Revenue (Vic) (2000) 2 VR 635; [2000] VSCA 122, considered

Freelance Global Ltd v Chief Commissioner…

Continue reading Compass Group Education Hospitality Services Pty Ltd v Commi...

Sign in free to access the full text

Details
AGLC
Compass Group Education Hospitality Services Pty Ltd v Commissioner of State Revenue [2020] QSC 184
Case
[2020] QSC 184
Decision Date

CaseChat Overview and Summary

Compass Group Education Hospitality Services Pty Ltd and Compass Group Education Operations Pty Ltd, trading as Compass Group, brought an appeal against the Commissioner of State Revenue, challenging the assessment of payroll tax on payments made to their employees. The appeal was lodged under section 69 of the Taxation Administration Act 2001, following the Commissioner’s disallowance of Compass Group’s objection to the assessment. Compass Group argued that they acted as an employment agency under section 13G(1) of the Payroll Tax Act 1971, and therefore, because their clients were exempt from payroll tax, the wages paid to their employees were also exempt under section 13J(2). The Commissioner contended that Compass Group were common law employers and, therefore, not subject to the provisions of Division 1B of Part 2 of the Payroll Tax Act. Alternatively, the Commissioner argued that Compass Group did not procure the services of their employees but rather contracted to provide services themselves through their employees.

The court examined whether Compass Group’s agreements with their clients and employees satisfied the definition of an ‘employment agency contract’ under section 13G(1) and whether Division 1B of Part 2 of the Payroll Tax Act applied to common law employers. Additionally, the court had to determine if Compass Group was entitled to relief from payroll tax liability under section 13J(2). The court concluded that Compass Group’s arrangements did not meet the definition of an ‘employment agency contract’ and that the provisions of Division 1B did not apply to common law employers. Consequently, Compass Group was not entitled to the payroll tax exemption claimed.

The appeal was disallowed, affirming the Commissioner’s assessment of payroll tax. The court’s decision hinged on the interpretation of the relevant provisions of the Payroll Tax Act and the nature of Compass Group’s employment arrangements.

Orders

Orders of the court

The appeal is disallowed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.