Court to rule on status of super for consultants
The challenge to the practice of hiring agents as independent contractors threatens to add 9 per cent - the equivalent of thousands of dollars - to the cost of each consultant.
The apparent policy shift has come to light in a lawsuit filed by Kelemen Commercial after two audits by the Australian Taxation Office that produced contradictory results.
The ATO assessments were conducted more than a year apart on the potential super liabilities for two consultants with the same contractual conditions, according to an affidavit filed by director Rudy Kelemen.
"[They] were not considered employees of the company. Each was entitled to commissions based on success fees, less any retainers paid to them by the company," he said.
In April 2012 the Tax Office found Kelemen did not owe any superannuation for the first consultant. But the findings were starkly different for the second consultant by June 2013.
"Notwithstanding the [ATO's] own findings ... the [ATO] determined that the company was liable for the payment of PAYG and superannuation for [the second consultant]," Mr Keleman said.
The ATO issued a statutory demand for the money, which Keleman Commercial is now petitioning the Supreme Court to set aside.
Mr Keleman declined to comment because the matter is now before the court. One of the consultants told BusinessDay he was unaware that the ATO had acted on his behalf.
cvedelago@theage.com.au
Twitter: @chrisvedelago
Frequently Asked Questions about this Article…
The real estate industry is facing potential increased employment costs if the Tax Office succeeds in requiring agencies to pay superannuation for 'consultant' sales staff, which could add 9% to the cost of each consultant.
The ATO is involved because they are challenging the practice of hiring agents as independent contractors, which could lead to agencies being required to pay superannuation for these consultants.
The ATO conducted two audits on Kelemen Commercial with contradictory results. Initially, they found no superannuation was owed for the first consultant, but later determined that the company was liable for PAYG and superannuation for the second consultant.
Kelemen Commercial is petitioning the Supreme Court to set aside the statutory demand for payment issued by the ATO, as they disagree with the ATO's determination of liability for the second consultant.
If the ATO's bid is successful, real estate agencies may face increased employment costs, potentially adding thousands of dollars to the cost of each consultant due to the requirement to pay superannuation.
The court ruling is significant because it will determine whether real estate agencies must pay superannuation for consultants, which could set a precedent affecting employment practices and costs in the industry.
Everyday investors might see changes in the operational costs of real estate agencies, which could impact profitability and investment returns if agencies are required to pay additional superannuation costs.
Real estate consultants should be aware that their employment status as independent contractors is under scrutiny, and they may be entitled to superannuation payments if the ATO's challenge is successful.
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