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23 Jul 14 Employee assessable on amounts not received - Cameron

The AAT has held that a taxpayer, an employee of a company ("CCS") controlled by him, was assessable in respect of amounts that the company should have withheld on account of his PAYG liability but which it found the company did not withhold and which, in any event, the company failed to remit to the Commissioner.

The AAT said, at paras 23 and 24:

"The absence of any specific evidence establishing Mr Cameron’s remuneration entitlement as an employee of CCS leaves open scope for the argument that his assessable income is limited to the amount of the payments he actually received. However the procedure that Mr Cameron adopted, in compiling CCS’s Business Activity Statements for the 2011 and 2012 tax years, involved calculating the approximate tax liability attributable to the payments he had received, and then using that information to record both his total remuneration and the amounts that CCS ought to have withheld from him. This practice is significant because it provides a basis for concluding that Mr Cameron and CCS conducted their affairs on the basis that the company would meet his income tax liabilities and that his total remuneration entitlement included both the direct payments that benefited him and an amount corresponding to the PAYG withholdings that CCS calculated as attributable to those payments...It follows that Mr Cameron’s assessable income was correctly set out in his income tax returns and, more specifically, the Commissioner’s assessment decisions."

The Commissioner's objection decisions in relation to amended assessments issued to the taxpayer were confirmed.

Cameron and FCT [2014] AATA 499 (22 July 2014).


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