Some common complaints from people who have been assessed for land tax are that they should be exempt because the property is their private residence not an investment property. Such matters turn on the facts and circumstances of every case and the OSR are not easily convinced without thorough considered submissions and supporting documentation.

Payroll tax is perhaps less clinical in its adaptation by the OSR and is the cause of immense frustration of businesses who are trying to structure their affairs efficiently as possible. Payroll tax grouping seeks to bind multiple entities the purposes payroll tax such that the threshold amount may only be used once. This is often done by being characterised as a related company, having common control, by tracing of interests, the subsuming rules or the use of common employees.

Avoiding these characterisations will require avoiding indicators such as:

. the extent of commercial transactions between entities, and the percentage of those transactions in relation to overall revenue

· whether any shared resources and services (including shared premises)

· when the ultimate control of each entity is in with the day-to-day operation is generally separate or intermingled

· whether there is financial independence

· there is a connection between one entity and other members of the group

· common traits between the nature of business conducted by each of the entities

· whether there is a connection between the owners of the entities and other members of the group

A further consideration is the issue of whether or not contractors can be characterised as employees in the circumstances in which that may occur.

Click here to view our newsletters for detailed information on land tax, payroll tax and contractor issues.