Payroll tax decision a win for patients
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.
