Sharing information with the state revenue office is risky business, especially as the ATO looks set to beef up audit activity.
South Australia has now enshrined its payroll tax relief program for GPs as a regulation under the Payroll Tax Act 2009, but the particulars of the arrangement may be worth a deeper look.
Announced back in May 2024, the SA tax relief has actually been in place since the state amnesty period ended in July of that year.
Practices that participate in the program are required to report their earnings from both bulk-billed services and privately billed services and the State Revenue Office then applies a percentage discount based on the individual practice’s bulk-billing rate.
Unlike in Queensland, where GP payroll tax exemptions automatically apply, practices in SA and some other states have to deal directly with the state revenue office.
To be clear, the only recent development is that the payroll tax exemption, as of March, appears as a regulation under state legislation – making the program official, as it were.
Adelaide-based healthcare accountant David Dahm has urged practices to consider the possible future downsides to sharing practice information directly with state revenue offices, given the potential for data sharing with the ATO.
“There’s a cascading effect of other laws you may trigger by doing that,” he told The Medical Republic.
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“You might get a door knock on superannuation, or you could also attract attention to PAYG, income splitting and personal services income.”
While Mr Dahm has long held this view, he is particularly concerned by the $1 billion that went to the ATO in the most recent federal budget specifically to extend and expand tax compliance activities.
The bulk of the funding will go to the Tax Avoidance Taskforce, with the remaining one quarter going toward personal income tax compliance and ensuring the timely payment of tax and superannuation liabilities.
“They’re looking at what’s called the tax avoidance economy, of which small business represents $17.6 billion,” Mr Dahm said.
“General practices that have volunteered themselves [to become] compliant might not realise it, but they’ve also drawn attention to themselves for these other regulators.
“They are low-hanging fruit.
“Whatever evidence you’re giving now could and may be potentially used against you later on.”
He urged practices to only take up the state-based payroll tax exemption offers after considering the possible ramifications.
“One of the biggest things I would recommend all practitioners to do is to urgently write to your practice owners and ask them if they have actually applied for amnesty, get some fairly urgent tax advice if they have, and take out tax audit insurance,” Mr Dahm said.
