Latest fight against application of payroll tax marks 'critical juncture' for mortgage broking industry
Mortgage aggregator Finsure’s case against Revenue NSW’s application of payroll tax is being heard by Justice H Bennett in the NSW Supreme Court this week.
Like the wider mortgage broking industry, Finsure has deeply criticised Revenue NSW’s application of the Payroll Tax Act 2007, warning that it risks broker independence, competition and consumer choice.
Under the Act, sole brokers risk being lumped with additional taxes passed down by their mortgage aggregator should they be deemed employees of the aggregator. Finsure has also cited concerns that brokers could lose their operational autonomy under the Act.
Mortgage and Finance Association of Australia (MFAA) chief executive Anja Pannek has previously labelled Revenue NSW’s application of the tax as “farcical”.
Outlining its case in a submission to the Inquiry into Payroll Tax Act Relevant Contractor Provisions in February, Finsure said: “Applying payroll tax to Finsure’s wholesale aggregation model fundamentally mischaracterises its role as a service provider and threatens the viability of independent mortgage brokers.”
Finsure accused the Revenue NSW chief commissioner of taking “a misguided position that brokers operating under Finsure’s aggregation model are performing work for Finsure, rather than operating independent businesses servicing their own clients. This interpretation incorrectly equates Finsure’s wholesale aggregation model with an employment-like relationship”.
In an open letter published in September, Finsure chief executive Simon Bednar said: “As we continue to prepare for our case in the NSW Supreme Court against the application of the payroll tax system by Revenue NSW, I’m concerned that the mortgage broking industry may be at greater risk than I first imagined.
“While I believe our position is strong, our investigation has led us to review broker contracts across the industry, where we discovered clauses which stipulate that brokers must adhere to the aggregator’s explicit instructions.
“Terms that limit broker autonomy or substitute their independent judgement with an aggregator’s operating rules places them at risk and creates an impression that brokers cannot run their business with genuine independence.”
Fellow mortgage aggregator LMG, which has been at the vanguard on the fight against the application of payroll tax, was found liable to pay payroll tax in April 2024, although it secured a number of exceptions.
Now it is Finsure’s turn.
“On Monday Finsure’s case in the NSW Supreme Court marks a critical juncture for the mortgage broking industry, challenging the way Revenue NSW seeks to apply payroll tax to broker payments,” Bednar wrote on LinkedIn. “This is more than a legal dispute – it’s a landmark case that could redefine how broker independence is recognised and protected across Australia.
“At the heart of the issue is the need to preserve genuine autonomy for brokers and maintain a competitive, choice-driven environment for consumers. Finsure has invested significant resources into preparing for this case and remains confident in the strength of its position.
“A ruling in Finsure’s favour could set a powerful precedent, safeguarding other aggregators from undue financial pressure, protecting the integrity of Australia’s financial system, and ensuring brokers retain the freedom to operate independently. It also has the potential to clarify the position of commissions paid to contractors for other industries.
"Ultimately, this is about protecting choice – for brokers, for consumers, and for the future of a resilient and competitive lending landscape.”
MPA has reached out to Finsure for a comment on the Supreme Court proceedings.
