Payroll tax win for GPs
After more than a year of AMA Queensland advocacy, the Queensland Government has agreed to limit its audits of GPs under a new interpretation of payroll tax laws.
The Queensland Government has seen sense on a payroll tax decision that threatened to close general practices across the state and the nation.
Over the past two years, GPs have been hit with backdated payroll tax bills based on a new interpretation of tax law from a NSW tribunal ruling.
Following AMA Queensland advocacy, the Queensland Revenue Office (QRO) has advised it will limit audits on GPs to the 2021-22 financial year and future years.
“We are beyond delighted that the QRO has listened to our sensible advice. This decision is a sensible first step to resolving this issue,” AMA Queensland President Dr Maria Boulton said.
“It gives GPs greater certainty about their financial futures and gives them time to comply with the new interpretation of tax laws.
“Practices have always paid payroll tax for receptionists, nurses and other staff. But doctors in practices work under different arrangements.
“Practices that had been totally compliant with the previous rulings suddenly found themselves hit with backdated payroll tax bills ranging from a few thousand to millions of dollars - bills they hadn’t budgeted for and had no capacity to pay.
“Many GP practices faced closure in the face of these unexpected bills, leaving communities without doctors.
“We hope this means those backdated tax bills will be cancelled and those practices can go back to delivering care to patients.
“We also hope other States will follow Queensland’s lead and implement similar limits on audits of GPs.
“We are facing a GP crisis across the nation. Now is not the time to add extra financial pressures on GPs.”
Background:
- GPs usually work under service agreements with practices.
- The practice provides a service – the premises, plant and equipment, billing services, reception, and administrative and allied health staff, but does not pay GPs wages, superannuation, leave or other entitlements or benefits, or provide professional development and training.
- Following a NSW Civil and Administrative Tribunal ruling, the Queensland Revenue Office (QRO) deemed GPs to be employees for payroll tax purposes.
- It sought to retrospectively tax individual practices for up to five years with a 75 per cent liability.
- 81 per cent of Queensland general practices would have been affected.
