As the financial year draws to a close, the looming deadline of 30 June serves as a stark reminder for businesses to ensure their affairs are in order. Amidst this flurry of activity, healthcare professionals, especially General Practitioners (GPs), are urged to heed the advice of experts like David Dahm regarding payroll tax implications and business structures.
In various states across Australia, there exist payroll tax exemption schemes tailored for the healthcare sector. These exemptions are often contingent upon specific criteria such as bulk-billing rates. Mr. Dahm’s firm specializes in assisting general practices, and he has noticed a surge in inquiries from GPs seeking clarity on their financial obligations.
“What’s happening now is that [these practices have] all been written to [by their state revenue office] saying, ‘give me your annual financial statements, and you now have to do a payroll tax reconciliation’,”
explained Mr. Dahm. This process entails scrutinizing the extent of bulk billing conducted by practices to determine the applicable tax liabilities accurately.
The impact of these tax regulations is beginning to manifest in practice finances, prompting many practitioners to reconsider their business structures. Mr. Dahm highlights an alternative model involving service trusts or tenant doctor arrangements where doctors collectively share costs related to premises, equipment, and IT systems – ultimately assuming control over administrative functions.
“We’re raising this because a lot of tax dollars are being paid that are unnecessary and compliance costs that are being incurred if you have the right structure,”
emphasized Mr. Dahm. Establishing the correct business framework not only optimizes financial efficiency but also mitigates legal risks associated with misclassification.
To safeguard themselves against potential pitfalls before the fiscal year-end, GPs are advised by Mr. Dahm to seek professional guidance promptly:
“Get something in writing before 30 June, just to protect yourself.”
Having a clear understanding of whether their practice qualifies as a medical business or an administrative entity can prevent complications during audits or regulatory reviews.
Mr. Dahm shared anecdotes where practitioners discovered discrepancies between their actual business setup and how it was portrayed on paper:
“We’ve had people about to lodge tax returns that have rung me up…the accountant [said], ‘We shouldn’t have called ourselves a general medical practice…it is an administrative entity’.”
In essence, proactively engaging with accountants and gaining clarity on one’s business classification can save significant resources in the long run while ensuring compliance with taxation laws.
Leave feedback about this