Potential payroll tax amnesty for GPs, but no dice for other medical and allied health professionals

The Queensland Revenue Office (QRO) is calling for medical centres who contract with general practitioners (GPs) to complete an expression of interest form by 30 June 2023 if they want to apply for an amnesty in respect of any payroll tax liabilities on payments made to GPs between the 2018 and 2025 income years.

The complete details of the amnesty have not yet been released. However, what we do know is that the amnesty:

• will only apply to medical centres who contract with GPs – that is, a GP who is registered with the Medical Board of Australia
• will not apply to all the other medical specialists and allied health professionals who are facing the same payroll tax issues as GPs.

Businesses seeking to rely on any amnesty will need to express their interest by 30 June 2023 and meet all additional requirements (which have not yet been announced) by 30 June 2025.

What do we know about the proposed amnesty?

The amnesty announcement comes after the QRO released its ruling in December 2022, setting out the Commissioner’s view on how the relevant contract provisions apply to payments made to practitioners by a variety of different ‘medical centres’, including GP clinics, dental clinics, physiotherapy practices, radiology centres and similar health care providers. We have previously written about the impact of the ruling.

It is not clear why the QRO’s amnesty only extends to businesses who make payments to GPs – this issue arises for a number of different professions and industries who carry on businesses using a service entity model. It was not until the decisions in The Optical Superstore and Thomas and Naaz that advisers have considered that payments made by a service entity from patient fees collected on behalf of a practitioner may be subject to payroll tax.

What should medical centres be doing now?

As they say, the devil will be in the detail.

Medical centres (even those who do not make payments to GPs) should keep an eye out for the details of the amnesty.

However, medical and allied health professionals need to keep in mind that there is not one general rule that applies to all medical centres or even all centres who make payments to GPs. The case authorities tell us that whether payments made by a service entity to a practitioner are the service entity’s wages for payroll tax depends on the specific circumstances of each case.

Medical and allied health centres should be obtaining advice about their specific circumstances and reviewing their service entity arrangements.

If you would like to learn more, we are conducting a webinar on 21 February 2023 about the QRO’s ruling and the amnesty. In the webinar, we will use case studies to investigate the different business models medical and allied health businesses generally use, and when those businesses will be liable for payroll tax on payments made to practitioners.

Otherwise, if you would like to discuss your or your clients’ circumstances, please contact a member of our team.