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We have recently seen surging audit activity from the ATO and OSR in the medical and allied health industry. Businesses should review their arrangements and check whether they are complying with their tax and superannuation obligations.
The recent decision in Thomas and Naaz has highlighted issues where medical and allied health industry businesses have not implemented their preferred model correctly. Businesses generally fall within one of two types of business models:
- a model where a medical practice contracts with employees or contractors
- a model where a medical service entity supplies services to medical practitioners carrying on their own business from the premises.
The PAYG withholding, superannuation and payroll tax consequences are very different under the two models.
The ATO and OSR are reviewing businesses’ documentation, and checking whether what happens in practice matches the documentation.
We are running a workshop to help clients and advisers identify the current tax risks. After this workshop, you will be able to identify:
- the different tax consequences under each business model
- the tax treatment of service fees paid by a practitioner to a service entity under the service entity model
- traps to watch out for when attempting to implement a particular model, including terms of the agreement and correctly reporting positions in financial statements and income tax returns
- whether the medical or allied health business needs to pay compulsory superannuation to a practitioner engaged as an independent contractor
- whether a service entity is liable for payroll tax on payments made to practitioners under the service entity model
- how the ATO’s guidance on allocating profits within professional firms applies to medical and allied health businesses.
The webinar will be recorded, so, if you are unable to attend at the advertised time, we will send you the live recording for future viewing.
WEBINAR – Tax prognosis for medical and allied health professionals
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