Decision Impact Statement
Weston v Commissioner of Taxation
 AATA 869
2008 ATC 10-052
73 ATR 631
Venue: Administrative Appeals Tribunal
Venue Reference No: 2007/5645 and 2008/2832-2833
Judge Name: Senior Member Pascoe
Judgment date: 30 September 2008
Appeals on foot:
Administrative Treatment (Implication on current Public Rulings and Determinations)
Superannuation guarantee charge
Superannuation contributions shortfall
Outlines the Tax Office's response to this case, which concerned whether the applicant had a liability to Superannuation Guarantee Charge and whether an additional Superannuation Guarantee Charge should be further remitted.
Brief Summary of Facts
1. The taxpayer engaged workers to work in his nut farming business.
2. The Commissioner conducted a Superannuation Guarantee audit and requested the taxpayer to provide Superannuation Guarantee Statements. The taxpayer did not respond.
3. The Commissioner determined that the taxpayer had not satisfied his employer superannuation contribution obligations and was therefore liable to a Superannuation Guarantee Charge ( "SGC" ) of $14,558.36 for the year ended 30 June 2003 and the quarterly periods from 30 June 2003 to 31 December 2005.
4. The Commissioner imposed a penalty under subsection 59(1) of Part 7 of the Superannuation Guarantee (Administration) Act 1992 ( "SGA" ) equal to double the amount of SGC payable by the taxpayer for each period. The penalty was then remitted to a rate of 10% of the amount of SGC payable (penalty of $1,455.77).
5. After making his objection decision, the Commissioner recalculated the liabilities for SGC and penalty and requested the Tribunal to increase the total SGC to $15,191.04 and the total penalty to $1,519.10.
6. The taxpayer considered that he satisfied his superannuation obligations. He had telephoned Wageline, and was advised of the appropriate hourly rate for one of his employees and to add 10% to cover superannuation. The taxpayer paid that additional 10% directly to the employee to manage.
7. The taxpayer also hired workers to perform casual labour. He claimed that the workers were contractors and that he wasn't required to make superannuation contributions on their behalf. Alternatively, he argued that he paid one worker the wage of several other workers and that if they were paid individually each worker would be under the superannuation eligibility threshold of $450 salary per month.
Issues decided by the Administrative Appeals Tribunal
Senior Member Pascoe found that:
1. The taxpayer had not discharged the burden of proving that the amounts paid to his workers were not salary or wages under the SGA.
2. The taxpayer was required to make superannuation contributions on behalf of his employees and he had failed to do so.
3. The taxpayer was liable to the SGC. The Tribunal accepted the Commissioner's recalculation of the amount of SGC to be assessed for the relevant periods.
4. The penalty should be remitted in full. The taxpayer believed that paying an additional 10% to one of his employees satisfied his superannuation obligations. It was also possible that the payments to other workers may not have attracted a liability for SGC if they had been dealt with and recorded correctly.
Tax Office view of Decision
The Tax Office accepts that the Tribunal's decision to remit the penalty in full was open to it on the facts as found. The Tribunal accepted that the taxpayer made honest mistakes in respect of his employer superannuation obligations. The Tribunal's decision recognises that issues involving the remission of penalty must be determined on the particular circumstances of each case.
Implications on current Public Rulings & Determinations
Implications on Law Administration Practice Statements
We invite you to advise us if you feel this decision has consequences we have not identified, or if a precedential decision such as a Public Ruling or an ATO ID requires reconsideration or amendment. Please forward your comments to the contact officer by the due date.
| Date Issued:
||14 October 2009
| Due Date:
||9 December 2009
| Contact officer:
| Email address:
||03 9275 5124
||03 9275 4801
||Australian Taxation Office
6 Gladstone St
Moonee Ponds VIC 3039
Superannuation Guarantee (Administration) Act 1992