General practice ‘won’t be singled out’ in tax clampdown

Jolyon Attwooll

6/12/2022 6:01:39 PM

The RACGP has welcomed concessions over payroll tax after extended advocacy with the Queensland Government and its Revenue Office.

Accountant doing tax.
The application of payroll tax on Queensland GP contractors could threaten the future of general practice in the state.

General practices will not be deliberately targeted as part a payroll tax crackdown, the Queensland Government has said in a development welcomed by the college.
RACGP Vice President and Queensland Chair Dr Bruce Willett said the clarification is one of several concessions emerging from regular meetings with revenue office officials.
‘Our aim from day one has been to resolve the payroll tax issues threatening the viability of general practice in Queensland,’ Dr Willett said.
‘I can now report that we have been making quiet but steady progress.’ 
Significant advocacy has focused on addressing concerns related to the Government treating GPs as practice employees rather than contractors, and requesting backdated payroll tax.
According to Dr Willett, the revenue office has said the strategy is not linked to a NSW ruling earlier this year that deemed practices liable to more payroll tax.
‘Practices are not completely out of the woods yet,’ he said.
‘But the Queensland Revenue Office has made it clear that there are no changes in the application of payroll tax law in Queensland following the New South Wales Civil and Administrative ruling and there is no plan to specifically focus on medical practices for unmet payroll tax obligations.’
The RACGP Vice President said that GPs need to be able to focus on patients rather than complex tax liabilities.
‘Our hardworking GPs and general practice teams have slogged through a particularly challenging few years on the frontline of COVID-19 and the vaccine rollout and certainly don’t need any more difficulties on their plate,’ he said.
The Revenue Office has reportedly said payroll tax surveillance is increasing across the entire business community due to improved detection and coordination.
‘The Queensland Revenue Office has provided written confirmation that it intends to work with the RACGP to provide a public ruling regarding the application of payroll tax,’ Dr Willett said.
‘This will provide a benchmark against which practices can measure themselves to ensure compliance.’
Dr Willett adds that the revenue office has also agreed to work through contract and operational provisions with the RACGP to help give practices greater clarity.
Mackay-based College President Dr Nicole Higgins said the issue is so serious that the future of general practice care in Queensland at stake.
‘What the Government needs to understand is that the 4.7% payroll tax rate is higher than the profit margin of most practices,’ she said.
‘Therefore, its application renders practices instantly unprofitable and unsustainable. 
‘Worse than that, the tax is being applied retrospectively for up to five years and so this could result in many practices becoming insolvent and having to close immediately. Make my words – we cannot and will not let that happen.’
The RACGP is advocating that general practices should be exempt from the tax to allow them to focus on giving the best possible care.
‘There is precedent for this given that practices are already exempt from GST as healthcare providers,’ Dr Willett said.
‘I strongly believe that a similar exemption from payroll tax for contracting doctors makes sense.
‘Most hospitals run as either public utilities or charities and are therefore exempt from payroll tax and this creates an uneven playing field.
‘If practices are subject to this tax, they will be unable to afford to continue providing care to the community, which will potentially channel patients into more expensive hospital care.
‘At a bare minimum, there should be no retrospectivity in the application of payroll tax, and practices need to be given certainty regarding how to become compliant. The fight continues and we will not give up because our members deserve nothing less.’
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