Do Labour Hire firms need to register with the TPB?

The TPB has released an information sheet on 8 January 2016 [TPB(I) 26/2016 Labour hire/on-hire firms] to assist labour hire/on-hire firms involved in the provision of tax related services to understand the operation of the tax agent services regime and whether or not they need to register with the TPB.

If the labour hire/on-hire firm is involved in placing a candidate with a business client to provide tax agent services, and the labour hire/on-hire firm is responsible for the remuneration of the candidate and also for ensuring that the end client is satisfied with the services provided by the candidate, then the labour hire/on-hire firm will most likely need to register with the TPB.

In appendix 1, the examples given, specifically point 3 show, where the Labour hire/on-hire firm on- hires one or more of its employees to a registered tax practitioner client [RTPC] to perform work under the RTPC’s general guidance and instruction at a place nominated by the RTPC, and the RTPC pays labour hire/on-hire firm a fee for providing the employees, but the RTPC is responsible for the services provided by the employees on behalf of the RTPC to the end client, then neither the labour hire/on-hire firm nor the employees are required to be registered.

This seems clear that the responsibility for the preparation of the work in a labour hire arrangement is clearly the responsibility of the registered tax practitioner client {RTPC}

Most interestingly, in Appendix 2 point 4, if a Labour hire/on-hire employee service provides service to a non-tax practitioner client [NTPC] (i.e. a client other than a registered tax practitioner), and if the Labour hire/on-hire firm is responsible for the services provided by the employees to the NTPC, then if the work undertaken by the employees constitutes a tax agent service the labour hire/on-hire firm is considered to be providing tax agent services to the NTPC for a fee.

More information available from TPB website.

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