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The ATO will appeal a decision by the Tribunal that found that a plumber engaged by a plumbing business was a contractor and not an employee for SG purposes.
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ATO to challenge AAT decision on plumbing business contractor
04 November 2024
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7 minute read
The Tax Office has filed a notice of appeal in the Federal Court of Australia to challenge a recent decision by the Administrative Appeals Tribunal (AAT) in Trustee for Peter Hatfield Trust v FC of T.
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In the decision handed down in late September, the AAT found that a plumber engaged by a plumbing business called Peter Hatfield Plumbing was a contractor and not an employee for the purposes of superannuation guarantee (SG).
This meant the plumbing business was not liable to pay a superannuation guarantee contribution for the plumber engaged by the business.
Before the AAT decision, the Commissioner of Taxation had determined that the relationship between Peter Hatfield Plumbing and the plumber was that of employer and employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA) following an audit.
The tribunal set aside the ATO’s decision, concluding that the plumber, Hargreaves, was not an employee of the applicant under the extended definition contained in subsection 12(3) of the SGAA.
In her decision, AAT senior member Dominique Grigg said the deed of control that may be exercised over a worker is a “prominent factor in determining the nature of the relationship”.
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“As a skilled, licensed plumber Mr Hargreaves was expected to perform the task at his discretion without supervision,” Grigg said.
“Mr Hargreaves advertised his services outside of his relationship with the Applicant. The evidence indicates Mr Hargreaves was operating his own business.”
The AAT also noted that there was also evidence that Hargreaves performed work for others independently of the applicant.
It also noted that he could refuse to do work and that the rate of pay was negotiated and nearly double the award rates.
Hargreaves also lodged BAS for his business and claimed expenses he incurred while performing jobs for the applicant through his business.
The tribunal concluded that Peter Hatfield Plumbing had discharged its onus of proving that it was not the employer of Hargreaves during the relevant periods and set aside the decision under review.
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