The Queensland Payroll Tax Amnesty… an Admission of Guilt, or a Lifeboat?

Meeting all the legal and regulatory standards that apply to operating a medical business, as well as maintaining high standards of clinical care, is a double responsibility that few medical practice owners may feel fully equipped for.

Without suitable professional support, errors and innocent omissions are almost inevitable, sometimes with the risk of devastating financial consequences.

Hopefully, all medical practice owners are now aware of the case of Thomas and Naaz, and that revenue authorities may consider that payments to contracted medical practitioners will count when assessing the practice’s liability for payroll tax.?For more information, refer to our article.

In some good news for medical practices, the Queensland Government has offered an amnesty to medical practices, understanding that many medical practice owners may have been unaware of all of their payroll obligations.

About the Amnesty

The effect of the amnesty is that medical practices that successfully apply for the amnesty will not be required to pay payroll tax on payments to contracted GP’s up to 30th of June 2025 and for the previous 5 years (2018-2025).

What are some of the pros and cons of the amnesty, and what should medical practice owners do about it?

Pros of the Amnesty

1. Payroll tax laws are a reality for all businesses in Queensland with a payroll. Medical practices are no different, and have always been subject to payroll tax, even if they did not understand that their payments to GP contractors could be subject to payroll tax.
2. Unless they successfully apply for the amnesty, many medical practices are probably already liable at law for many thousands of dollars in historical unpaid payroll tax and potential penalties.
3. The amnesty is not an exemption, but medical practices that successfully apply for the amnesty will not be required to pay payroll tax on payments made to contracted GPs up to 30th of June 2025 and for the previous 5 years (2018-2025).
4. The amnesty is specific to payments to contracted GPs by general medical practices. By accessing the amnesty, general medical practices have a unique opportunity to avoid the costs of payroll tax (according to the terms of the amnesty) that is not available to any other type of business.
5. Medical practices that are otherwise liable to pay payroll tax, and access the amnesty, will have an opportunity to adjust and make provision for the costs of payroll tax after 2025.

Cons of the Amnesty

1. Some medical practice owners may feel that participating in an amnesty is an admission of wrongdoing.
2. Their sentiment, though understandable, may (unfortunately) distract them from squarely considering the reality of payroll tax law in their situation.
3. That is, medical practice owners who act only on sentiment may be distracted from taking necessary action to properly understand their situation… and some will miss an excellent opportunity to apply for an amnesty that has been specifically designed to support the long-term welfare of their business.

When will Applications for the Amnesty Close?

To be eligible, medical practices first need to complete an expression of interest form by 29 September 2023. This date has been extended by the government from the original date of 30 June 2023.?After the closing date, the opportunity to access the amnesty may be lost entirely.

What Should Medical Practices Do?

We urge all medical practice owners to squarely consider the suitability of the amnesty for their situation, while they still can.

Or to put it another way… if your business needs a lifeboat, don’t miss it.

More Information

Detailed information about the amnesty is available at this link.

Some?more information is available here?or you can?book online for an initial no-obligation chat?about reviewing an employment contract or contractor agreement.

Author: Dr. Anchita Karmakar, Medical Liaison Officer

Contributor: Scott McSwan, Director