The Queensland Revenue Office has reportedly made ‘concessions’ after meeting with AMA and RACGP representatives.
Peak doctors’ bodies have been reassured that general practice won’t be singled out or targeted for auditing in Queensland, even agreeing to work with the RACGP to create a clear, public ruling on payroll tax application.
The ruling will provide a benchmark against which clinics will be able to ensure compliance and should be released within the month.
In a letter to RACGP Queensland chair Dr Bruce Willett – sighted by The Medical Republic – QRO assistant commissioner Amy Rosanowski confirmed these measures in writing.
“As discussed, I would also like to reiterate QRO’s approach to administering the payroll tax legislation in relation to medical practices or any other industry is longstanding and has not recently changed,” she wrote.
To be clear, the letter did not mention the Thomas and Naaz decision by the NSW Civil and Administrative Tribunal or whether the interpretation of payroll tax law would be changing in the future.
“We’ve reviewed the New South Wales decision and haven’t identified any aspect we consider changes the scope, practice or approach to payroll tax in Queensland,” a spokesman for the QRO told TMR.
The 2021 Thomas and Naaz ruling found that even though doctors in a practice setting may consider themselves to be co-located sole traders, the clinic payment structure may count as a “relevant contract”, thus making it subject to state payroll tax.
A more recent ruling from the Australian Taxation Office found there would be tax implications if a practice’s contractor GPs are not seen to be “making a public offer” of their services via, say, a website.
The QRO also confirmed that, even though it wouldn’t single out general practice as a profession, it was increasing payroll tax surveillance across the entire business community.
It did, however, appear that the QRO is committed to a no-surprises approach.
“I acknowledge from your representations that payroll tax implications may raise complexity and compliance concerns for medical practices,” Ms Rosanowski wrote.
“As we discussed, QRO is committed to assisting taxpayers identify and comply with their taxation obligations.
“To this end, I indicated QRO will provide greater guidance to the medical industry by publishing a public Revenue Ruling.”
The ruling is essentially a written outline of the Commissioner of State Revenue’s view on how certain aspects of QRO legislation should be interpreted.
This one will focus on the employer and contractor provisions of the payroll tax legislation as well as any other relevant issues, such as the availability of any exemptions.
Dr Willett told TMR that he understood the ruling would go through a point-by-point discussion of the risks related to various contractual and operational points.
The stakes are relatively high: in Queensland, the payroll tax rate is 4.7%, more than the profit margin of most practices.
In cases where payroll tax bills are applied retrospectively, Dr Willett said, clinics are likely to become insolvent.
Given that health services are already exempt from GST, the RACGP will attempt to make the case that GPs should also be exempt from paying payroll tax, in the same way that hospitals and charities are.
“At the political level, we’re in contact with the Treasurer’s office and still pushing really hard,” Dr Willett said.
If that exemption doesn’t come through, he sees a storm gathering on the horizon in terms of the government’s promised urgent care clinics.
“It’s very difficult for anyone to provide after-hours care without a structured roster,” said Dr Willett.
“And, unfortunately, a structured roster is one of those things that makes you more likely to [qualify as having an employer-employee relationship and] attract payroll tax.”
This report has been updated at 4:45pm Wednesday December 7 with comment from the Queensland Revenue Office.
