Pre-Paid Professionals Administration Limited v Commissioner of Taxation & Anor [2011] HCATrans 37

Pre-Paid Professionals Administration Limited (the applicant) sought special leave to appeal to the High Court of Australia from a decision of the Full Federal Court. The dispute concerned the deductibility of certain payments made by the applicant to a superannuation fund, which the Commissioner of Taxation (the respondent) had disallowed.

The primary legal issue before the High Court was whether the payments made by the applicant constituted "personal services income" for the purposes of Division 85 of Schedule 1 to the *Income Tax Assessment Act 1997* (Cth). This determination was crucial for establishing whether the applicant was entitled to deduct the payments under section 26-35 of the Act.

Heydon J, in considering the application for special leave, focused on the nature of the payments and the relationship between the applicant and the individuals receiving the payments. His Honour noted that the payments were made to a superannuation fund established for the benefit of individuals who performed services for the applicant. The question was whether these individuals were performing those services as "personal services entities" in their own right, or whether the applicant was essentially paying itself through the superannuation fund. His Honour indicated that the applicant's argument that the payments were not personal services income was not plainly correct, and that the Full Federal Court's decision appeared to have been based on a correct application of the relevant legislative provisions.

Special leave to appeal was refused.