Birchstone Brief for the week ended 28 July 2023

Don’t forget to register for our second annual Advisers’ Day! 

The day will be packed with tax, trust and estate planning sessions curated for professionals in the SME space. There will also be time to network and unwind over drinks after the technical sessions conclude at 5PM. 

We are particularly excited about our first session, “Characterising Workplace Relationships: Employee v Contractor”, which will be presented by barrister Justin Byrne. 

Justin came to the bar in 2019 after over 20 years of working as a solicitor specialising in “front end” tax advice work, having advised on a wide range of complex taxation issues including income tax, capital gains tax, stamp duty and GST. He is also experienced in tax controversy, having appeared in matters in the State Courts, AAT, Federal Court and High Court of Australia. Most recently, Justin successfully appeared for the taxpayer in JMC Pty Ltd v FCT [2023] FCAFC 76, where the Full Federal Court held that a lecturer engaged by the taxpayer was a contractor and not an employee (either at common law or within the meaning of section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth)) and therefore no superannuation was required to be paid to them. 

Justin will cover a number of topics in this session, including: 

  • the relevance of the various ‘indicia’ of an employment relationship established by case law following the 2020 High Court decisions in Jamsek and Personnel Contracting;
  • the recent Full Federal Court decisions in Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48 and JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76; and
  • some tips to help ensure certainty about the legal character of a given workplace relationship. 

ATO Updates

Class rulings issued

The ATO has issued:

  • CR 2023/40 – Pemby Pty Ltd – Use of an electric bicycle by an employee; 
  • CR 2023/41 – Norwest Energy NL – Scrip for scrip roll-over; and 
  • CR 2023/42 – NatPark FBT Register report – Use for calculating car parking benefits. 



Equality Australia Ltd v Commissioner of Australian Charities and Not-for-profits Commission [2023] AATA 2161 – LGBTQI+ advocacy group not entitled to PBI registration due to lack of direct benevolence

Three members of the AAT have unanimously held that people who identify as LGBTQI+ are capable of being regarded as persons in need of benevolence. However, two of those members found that the applicant (an organisation which had since 2017 focused on advocacy and lobbying to change laws and social practices which were injurious to LGBTQI+ persons) did not provide direct benevolent relief to LGBTQI+ persons and was therefore not entitled to registration as a public benevolent institution (PBI). The third member of the tribunal disagreed, holding that the applicant had engaged in activities and projects beyond seeking to change laws which could be appropriately described as providing benevolent relief. 

Zhang v Chief Commissioner of State Revenue [2023] NSWCATAD 181 – Taxpayer’s delay leads to double duty

The NSW Civil and Administrative Tribunal has upheld a decision of the Chief Commissioner of State Revenue not to refund duty paid on a contract to purchase a proposed strata lot which was later rescinded ab initio (with a new purchase contract being entered into by a trust). This was because:

  • the assessment was correct at the time it was made; and
  • the taxpayer failed to apply for a refund within 5 years of the initial assessment or 12 months after the contract was cancelled (as required by section 50(2) of the Duties Act 1997 (NSW)). 

Appeals: Bechtel Australia 

The taxpayer has appealed to the Full Federal Court against the first instance decision in Bechtel Australia Pty Ltd v FCT [2023] FCA 676 (covered in the Birchstone Brief for the week ended 23 June 2023), in which the Federal Court held that the otherwise deductible rule did not apply to costs an employer incurred in paying for their FIFO employees’ travel costs as the employees were not rostered on for duty until arrival at the relevant work site.



Draft legislation to clarify input tax credit rules

Treasury has released exposure draft legislation and explanatory materials regarding miscellaneous amendments to Treasury portfolio laws which seek to ensure the law operates as intended by correcting technical or drafting defects, removing anomalies and addressing unintended outcomes. One of the matters intended to be addressed by the draft legislation is ensuring that input tax credits are attributed to the appropriate GST tax periods. 

Statute Law Amendment (NTCAT Conferral of Jurisdiction) Bill 2023 (NT) introduced

Bill has been introduced into the Northern Territory Legislative Assembly which, if enacted into law, will amend various Acts to provide for:

  • the dissolution of the Taxation and Royalty Appeals Tribunal; and 
  • the transfer of jurisdiction to hear tax review applications to the Northern Territory Civil and Administrative Tribunal (NTCAT). 


Birchstone Brief

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