28 June 2023

RACGP wins payroll tax reprieve for SA general practice

The Royal Australian College of GPs has secured an important payroll tax amnesty for practices across South Australia.

After extensive negotiations with the South Australian Government, RACGP South Australia Chair Dr Sian Goodson is pleased to announce South Australian Treasurer Stephen Mullighan has agreed to:

  • provide an amnesty on the application of payroll tax to tenant GPs to 30 June 2024

  • similar to the Queensland Government’s announcement in April this year, this will give practices time to understand how the provisions relate to their business model and how to accurately comply with the provisions

  • as part of the amnesty, the Government will not audit eligible businesses who register prior to 30 September 2023, and will not apply penalties in relation to non-compliance with the provisions for the period up to the end of the amnesty period.

It comes following the Supreme Court of NSW Court of Appeal rejecting an attempt to appeal the controversial Thomas and Naaz tribunal ruling. In that ruling the tribunal found that tenant GPs, who pay a percentage of their earnings to a clinic rather than being paid a wage, count as employees for payroll tax purposes. This potentially disrupts established business models for many practices, which now face the unenviable choice of charging patients more or shutting up shop. The RACGP has been advocating ever since for a fair go for all practices, including in South Australia.

RACGP South Australia Chair Dr Sian Goodson said today’s announcement was a win for general practice care.

“It’s very positive news the South Australian Government has heeded the RACGP’s calls and recognised how this could impact general practice care,” she said.

“It follows a series of meetings and discussions between RACGP South Australia and Treasurer Stephen Mullighan. I would like to thank Treasurer Mullighan for working with the College and carefully listening to our member’s concerns. This announcement gives practices a reprieve to better understand their own payroll tax obligations and how to get their house in order.

“The New South Wales tribunal ruling threw such a spanner in the works because the tribunal found that practices were, depending on their circumstances, potentially liable for payroll tax on what we call ‘tenant’ GPs. These GPs are not employees, rather they pay a percentage of their earnings to the clinic in exchange for using the facilities and administration services and the like. This caught many practices off guard at a time when they are already struggling to make ends meet.

“GPs and practice managers are concerned that this tax obligation could send them to the wall or, at the very least, put them in an unenviable position where they have no choice but to hike patient fees. So, today’s announcement is a positive step forward for general practice care in South Australia.”

Dr Goodson urged all practices to take advantage of this amnesty before the 30 September 2023 deadline.

We encourage all practices to apply for the amnesty as soon as possible,” she said.

“The RACGP is working harder than ever to fight for GPs, practice managers, nurses, receptionists, and administrative workers, and we will continue to support and assist practices throughout this process. This amnesty represents a crucial lifeline for practices right across the state, it gives GPs and practice owners time to adjust their structure if needed and helps to secure the future of general practice care in South Australia.

“We will continue working closely with the Government when it comes to payroll tax obligations so that practices remain viable, and no patients anywhere are left behind.”

South Australian Treasurer Stephan Mullighan said:

“The Royal College of General Practitioners has been very constructive and their advocacy has helped deliver this important outcome. I thank them for coming together with us to reach an agreement to ensure frontline health services are not impacted.”

Media enquiries

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