It Depends – Payroll tax amnesty

In this edition of ‘It depends’, associate Elise Emmerson talks about the Queensland payroll tax amnesty.

Want to know more about this topic? On 9 August, as part of our 2023 Tax Masterclass Series, partner Sarah Lancaster and lawyer Charlotte Boothroyd are running a webinar on 2023 payroll tax issues for GPs and allied health professionals. Register now.

Video transcript

Welcome to this edition of It depends. Today, I’ll be talking about the Queensland payroll tax amnesty and what you need to know.

What issue is the amnesty addressing?

The Queensland payroll tax amnesty has come about as a result of the public ruling released by the Queensland Revenue Office titled ‘Relevant contracts in relation to medical centers’. So, this public ruling effectively states that the relevant contract provisions in the Payroll Tax Act apply to general medical practices in a way in which the payments made to contracted general practitioners will form part of taxable wages for payroll tax purposes. So, this means that generally payroll tax will need to be paid on payments made to contracted general practitioners unless an exemption applies. As a lot of general practices were acting on the assumption that the relevant contract provisions did not apply to them, this amnesty gives general practices the ability to come up to date and make any relevant disclosures to the QRO. It’s important to remember that the payroll tax amnesty only applies to general practitioners who are registered with The Medical Board of Australia who are independent contractors, not common law employees.

What period does the amnesty cover?

The amnesty period is up to 30 June 2025 and either starts the earliest of 1 July 2018 or if the practice has already been subject to audit activity, the earliest date that this audit activity relates to. This means that if a general practice successfully applies for the payroll tax amnesty, that payroll tax will not need to be paid on payments made to contracted GPs from 1 July 2018 to 30 June 2025.

Is my business eligible for the amnesty?

Well, this depends and to be an eligible practice for the payroll tax amnesty, a medical practice needs to be a designated medical practice. So, the specifics of this definition are outlined in the guidance from the QRO, but generally, this doesn’t include other types of medical practices. So, specialist medical practices is an example. It also doesn’t include new medical practices which were established and making payments after 10th of February 2023. And it also doesn’t include medical practices that were already paying payroll tax on payments made to contracted GPs unless they’ve been subject to audit activity in this space.

What are the other requirements of the amnesty?

The most important other requirement is making sure that you lodge an expression of interest form by the 29th of September 2023. Practices will also need to make a voluntary disclosure to the QRO and also make sure that they’re registered for payroll tax.

What will happen if I don’t apply for the amnesty?

The QRO’s amnesty guidance outlines that from 1 July 2025, those who don’t participate in the amnesty could be subject to audit activity. And while the audit limitation period is limited for those who do participate, this won’t be the case for those medical practices that don’t participate. So, if a medical practice decides not to apply for the payroll tax amnesty, there is a chance that they could be subject to audit activity for historical financial years. If you or your clients have any questions about the payroll tax amnesty, please feel free to contact me or a member of my team. My colleagues Sarah and Charlotte are also running a webinar on the 9th of August, and one of the issues that they will discuss is the payroll tax amnesty. And you can register for this webinar on our website.