Payroll tax campaign

Payroll tax campaign

 

Payroll tax

UPDATE

On Thursday 12 December, Queensland Health Minister David Janetzki wrote to AMA Queensland informing us that he is introducing the Revenue Legislation Amendment Bill 2024 into the Queensland Legislative Assembly.

The Bill contains amendments to the Payroll Tax Act 1971 that exempts all GPs from payroll tax - a result that AMA Queensland has been fighting for since 2021 when the interpretation of payroll tax changed without warning.

Next step - extending the exemption to all non-GP private specialists, in the same way all public and most private hospitals are exempt from payroll tax.

Background

Under existing tax laws, general practices have always paid payroll tax on their employees, including receptionists and nurses, but not for GPs because they work independently - essentially renting their workspace from the practice.

However, in 2020, a New South Wales tribunal ruled that independent practitioners were employees for payroll tax purposes. Under tax harmonisation arrangements between the states, in 2021 the Queensland Revenue Office began auditing general practices using the new interpretation of the law.

GPs began receiving unexpected bills, backdated five years. These bills were out of the blue and unbudgeted for, as GPs had been fully compliant with the law for decades. These practices were facing closure or passing the costs on to patients as a 'patient tax''.

An exemption is the clearest way to ensure patients do not bear the brunt of this new interpretation of tax law.

  • The amnesty for GP specialists was announced by the Premier following National Cabinet and after AMA Queensland raised the alarm on behalf of several GP practices receiving multi-million dollar liability notices.
  • AMA Queensland continues to advocate for all medical businesses to be spared retrospective liability to give them time to adjust their structures and practices in line with the QRO’s ruling.
  • AMA Queensland has not had any specialist practices advise they have been audited or found liable for payroll tax. We urge any practices audited or found liable to contact us immediately.

Visiting Medical Officers (VMOs) and private hospital specialists

  • The key exemption in the Payroll Tax Act 1971 (Qld) relevant to VMOs and private hospital specialists is Section 13B(2)(b)(iv) which applies to persons providing ‘services of that kind to the public generally'.
  • This is generally understood to include private specialists that treat patients in private rooms and:
    • at public or private hospitals or 
    • other private practice clinics.
  • Businesses must obtain independent advice specific to their circumstances to determine if they satisfy the terms of the exemption provision. Please also refer to Cutcher & Neale’s checklist for other key issues on which to seek professional advice.

Other non-GP specialists operating in private practice

Specialists that exclusively operate for a single practice or group may attract payroll tax if they 
reach the annual $1.3 million threshold.

All non-GP specialists and medical centres

  • All non-GP specialists must:
    • consider their specific arrangements and the factors set out under section 7 of the QRO’s Public Ruling PTA021.3. Payroll tax exposure is lower where medical centres have an agreement in place with non-GP specialists that satisfies these factors 
    • ensure patient referrals are directed to the specialist and not the medical centre.
  • All non-GP specialist medical centres using clearing accounts must consider their banking arrangements as a priority.
  • Businesses must obtain independent advice specific to their circumstances to determine their payroll tax risk. Please also refer to Cutcher & Neale’s checklist for other key issues on which to seek professional advice.

Our corporate partner, Cutcher & Neale, is also offering AMA Queensland non-GP specialist members a complimentary 45 min private discussion to help individual practices determine their payroll tax exposure. Cutcher & Neale's Payroll Tax Exposure Checklist may further assist medical businesses in understanding recent developments in payroll tax approaches. Please contact Cutcher & Neale for additional guidance on 1800 988 522 or email cnmail@cutcher.com.au.

AMA Queensland has praised the Queensland Government for giving all medical practices payroll tax clarity.

The Queensland Revenue Office (QRO) released an updated payroll tax public ruling for medical centres on 19 September 2023.
 
The new ruling provides clarity about issues relevant to ‘medical centres’ which encompasses a range of health providers in addition to general practitioners and medical specialists.
 
Most importantly, the QRO has confirmed direct payments from patients to practitioners are not subject to payroll tax liability.
 
“This is a welcome relief for many different medical businesses who have been left in limbo since release of the QRO’s previous ruling in December 2022,” AMA Queensland President Dr Maria Boulton said.
 
“Many will be able to adjust their arrangements so they do not have to pass the tax onto their patients.
 
“We know people are doing it tough with cost-of-living expenses and this means they likely won’t face extra fees when seeing their doctor.
 
“I am pleased the Queensland Government has listened to AMA Queensland and our members and is leading the nation in solving this crisis.
 
“They should be commended for providing this clarity along with their general practice amnesty which is the most generous of all jurisdictions and will give GP clinics time to make the required changes.
 
“We call on other state and territory governments to follow Queensland’s example and provide the same certainty for their local businesses.
 
“Non-GP practices should also be included in the amnesty now given the ruling applies to all specialists and other health businesses as well as GPs.
 
“We are working with our corporate partners to ensure this solution is practical and we urge all practices to contact their professional advisors for updated advice in light of this new ruling and in time for the QRO’s amnesty deadline of 10 November 2023."
 
Our members can contact AMA Queensland corporate partners Cutcher & Neale and Hillhouse Legal Partners for financial and legal advice specific to their business.

The Treasurer has announced a new Public Ruling on payroll tax for GPs. AMA Queensland welcomes the state government’s sensible decision to minimise the impact of its new patient tax.

Treasury will issue a new Public Ruling next week that makes it clear that patient fees, including any out-of-pocket expenses, will not be subject to payroll tax when they are paid directly by a patient to a GP for that GP service.

“This is a sensible decision that recognises most GPs work independently and should not be subject to payroll tax,” AMA Queensland President Dr Maria Boulton said.

“We look forward to seeing the Public Ruling as the devil is in the detail.

“We have been advocating for general practices to be exempt from this new patient tax, in the same way that all public and some private hospitals are exempt from payroll tax.

“This new Public Ruling, combined with the amnesty until June 2025, will give practices the time to ensure they comply with the new interpretation of the payroll tax law.

“We saw practices suddenly being hit with backdated payroll bills ranging from tens of thousands to millions of dollars.

“Practices could not afford these bills and were facing the choice of passing on the new tax to patients or closing their doors.

“This was a potential catastrophe during a cost of living crisis, and would have wiped out any benefits from the federal government’s modest increases to Medicare patient rebates.

“We have taken every opportunity to raise this issue with politicians from all sides and all levels of government, and thank the Treasurer for listening.

“We also welcome the decision to extend the deadline for applying for the amnesty until 10 November, as this will give practices more time to consider the new ruling and seek legal and financial advice.”

Excerpt from Hansard, 14 September 2023: 

Treasurer Cameron DICK: I anticipate that the Queensland Revenue Office will next week issue an updated public ruling to provide more certainty to businesses operating medical practices. This is a national payroll tax issue that arose as a result of legal proceedings in New South Wales and Victoria. Unlike Queensland, revenue offices in other states have actively pursued compliance from medical practices. Queensland, of course, was the first state to offer an amnesty relating to payments to contracted GPs - an amnesty that is in effect until 30 June 2025. Other states have followed our lead, instituting amnesties of their own. Now, Queensland is taking the lead again.

I am advised that the ruling to be issued next week will make clear that under normal business arrangements patient fees, including the Medicare benefit, and any out-of-pocket expenses when they are paid directly by a patient to a GP for that GP’s services will not be subject to payroll tax. I understand that this presents a viable option for practices going forward. It is an important step on the path to the resolution of this national issue. Given that this guidance is being updated, I can also announce -

Opposition Leader David Crisafulli: GP tax.

Mr SPEAKER: Order! Leader of the Opposition, you will cease your interjections.

Mr DICK: The Leader of the Opposition is a little sore after yesterday! 

Mr SPEAKER: Treasurer, that is not helpful.

Mr DICK: Given that this guidance is being updated, I can also announce that we are extending the expression-of-interest period for the amnesty from 29 September to Friday, 10 November 2023. I thank the Queensland Revenue Office and the Royal Australian College of General Practitioners for their commitment to working in good faith to find a nation-leading solution to this issue. Along with the Australian Medical Association, they are strong advocates for their profession and we always welcome their advocacy.

Treasurer Cameron Dick has announced an extension to the expressions of interest deadline for the Queensland Revenue Office (QRO) GP payroll tax amnesty.

The new EOI deadline is 10 November 2023.

The Treasurer has also advised that the QRO will be issuing an updated public ruling next week which will provide a solution to the current payroll tax crisis facing general practice.

“This is a sensible decision that recognises most GPs work independently and should not be subject to payroll tax,” AMA Queensland President Dr Maria Boulton said.

“We look forward to seeing the Public Ruling as the devil is in the detail.

“We have been advocating for general practices to be exempt from this new patient tax, in the same way that all public and some private hospitals are exempt from payroll tax.

“This new Public Ruling, combined with the amnesty until June 2025 and new EOI deadline, will give practices time to ensure they comply with the new interpretation of the payroll tax law.

AMA Queensland urges all eligible practices to obtain relevant professional advice about whether to register in time to meet the new 10 November EOI deadline.
 
‘If you haven’t already got advice, please go speak to your accountants and lawyers, especially about the new public ruling once released,’ said AMA Queensland President Dr Maria Boulton.
 

AMA Queensland members are reminded that expressions of interest (EOIs) for the Queensland Revenue Office’s payroll tax amnesty are due 29 September 2023.
 
The QRO recently issued a fact sheet advising that submitting an EOI ‘doesn’t automatically make you liable for payroll tax’.
 
This is in addition to its previous indications that practices that do not register may be the subject of compliance activities from October this year. 
 
This has prompted more practice owners to submit EOIs, including AMA Queensland President Dr Maria Boulton.
 
"I decided to lodge one and it was easy, with no documents required to register," said Dr Boulton.
 
"My choice was simple – if we don’t register then it’s highly likely we will be audited and could face retrospective liability, interest and penalty of up to 75 per cent.
 
"I urge all practices to get their own advice and seriously consider submitting an EOI before the 29 September deadline."
 
AMA Queensland corporate partner, Hillhouse Legal Partners, also issued updated advice.
 
"In our view these clarifications provide a lot more certainty to practices that may have been 'on the fence' about whether or not to lodge and expression of interest for the amnesty and we think that all practices that may be eligible should seriously consider (or possibly reconsider) their position on entering an expression of interest," the statement said.
 
AMA Queensland is watching national developments concerning payroll tax closely and continues to advocate for state and territory governments to legislate an exemption for general practice.

Register now

AMA Queensland members will have noticed that the imposition of payroll tax on general practice continues to be a hot media topic, indicating it is quickly becoming a national issue.
 
Earlier this month, the New South Wales (NSW) and Victorian revenue offices published updated public rulings, in line with that released by the Queensland Revenue Office (QRO) last year.

Joint AMA-RACGP advocacy then prompted the NSW Finance Minister to announce a one-year ‘pause’ on audits.
 
Now, Australian Capital Territory (ACT) practices have been slugged with liability notices but Chief Minister Andrew Barr has restricted its amnesty to those that bulk-bill at least 65% of their patients and register for MyMedicare.
 
Recent data released by the Federal Government shows the ACT has the lowest bulk-billing rates in the country, with just 25.5% of patients ‘always’ bulk-billed and another 23% ‘usually’ bulk-billed (at least half the time).
 
This raises questions about the realistic number of ACT practices that could even qualify for the amnesty.
 
It also makes Queensland’s scheme look far sunnier than that on offer to our southern colleagues.
 
AMA Queensland is again urging all practices to ensure they have sought appropriate professional advice on whether to register an expression of interest for the QRO’s amnesty with sufficient time before the 29 September 2023 deadline.
 
The QRO has made it clear that practices that do not register may be the subject of compliance activities following that date.
 
Our advocacy for an exemption for general practice is continuing and you can access the latest information on this page. 
 

The Queensland Revenue Office (QRO) has released a fact sheet on its website with further details about the payroll tax amnesty for general practice, following AMA Queensland raising doctors’ concerns that registering for the amnesty may amount to an admission of liability.
 
The fact sheet states the Expression of Interest (EOI) ‘doesn’t automatically make you liable for payroll tax’ and that if practices are ‘unsure whether you’re eligible for the amnesty, the best thing to do is express an interest before the closing date’.

View the factsheet

AMA Queensland members are reminded that EOIs for the Queensland Government’s payroll tax amnesty are due 29 September 2023 via the QRO website. 

Visit the Queensland Revenue Office website

We are urging all practices to ensure they have sought appropriate professional advice on whether to register for the amnesty in time to meet the EOI deadline. The QRO has indicated, including in the materials published today, that practices that do not register may be the subject of compliance activities following closure of the EOI process.
 
On 11 August 2023 both the Victorian and New South Wales state revenue offices released updated payroll tax revenue rulings concerning medical centres. South Australia released an updated ruling on 30 June 2023. The rulings are harmonised with that released by the QRO in December 2022.
 
AMA Queensland is continuing to advocate for a payroll tax exemption for general practices. 

AMA Queensland asked the Queensland Revenue Office (QRO) about likely timeframes for its update to Public Ruling ‘Relevant contracts – medical centres’.

The QRO advised the updated Public Ruling will be available before the second ‘information requirement’ stage of the payroll tax amnesty process but not before the Expression of Interest (EOI) deadline of 29 September 2023. 

This means practices wishing to qualify for the amnesty must submit an EOI by 29 September 2023 without waiting for guidance from an updated QRO Public Ruling.

Practices are reminded that they will be ineligible for the amnesty if they do not complete an EOI prior to 29 September 2023.

The QRO have said that the updated Public Ruling will provide guidance on the second stage, which requires practices to make voluntary disclosures of certain information and to register for payroll tax if not already registered. More information about the amnesty, including the EOI process and second stage information requirements can be accessed on the QRO’s website.

AMA Queensland again urges practices to seek independent accounting and other professional advice about whether to submit an EOI in time for the 29 September deadline. 

The QRO has committed to advising AMA Queensland once the updated Public Ruling is available, and we will contact members as soon as it is released.

AMA Queensland has been liaising with the Queensland Revenue Office (QRO) to obtain greater clarity for practices about the payroll tax amnesty for contracted general practitioners.

The QRO released two key documents setting out details for the amnesty on 16 March 2023 including the:

In addition, AMA Queensland provided input to the QRO for associated educational materials (released 11 April 2023).

The purpose of these materials is to help practices decide whether to apply for the amnesty and submit an Expression of Interest (EOI) by the 29 September 2023 deadline.

AMA Queensland urges all practices to seek appropriate legal, accounting and other professional advice on the amnesty, associated documents and individual business implications as soon as possible. Expressions of interest for the amnesty are due by 29 September 2023.

 

Queensland is the only state or territory so far to win at least an amnesty for GPs from this unfair tax.

This new interpretation of the law means longstanding arrangements for GPs have been turned on their head. Practice cannot absorb this new tax without passing it on to patients. It is an unfair tax on access to healthcare.

We continue to fight against this new interpretation of the existing law, which threatens to force practices to the wall and make primary care increasingly less accessible to the community. 

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