RACGP achieves hard-fought wins on Queensland payroll tax

Royal Australian College of GPs

The Royal Australian College of General Practitioners (RACGP) has warmly welcomed several clarifying concessions from the Queensland Government concerning payroll tax liabilities for general practices.

It follows months of hard work from the college’s Queensland faculty to fight for practices that have contracting doctors. Some Queensland GPs have been issued retrospective tax bills for thousands or even millions of dollars after concerns that the Queensland Revenue Office changed the way it taxed GPs in response to a New South Wales Civil and Administrative ruling in Thomas and Naaz Ptd Ltd v Chief Commission of State Revenue 2022 earlier this year.

Queensland RACGP Chair Dr Bruce Willett said the college would continue advocating strongly for hardworking members across the state.

“The battle is not over, but we are making progress,” he said.

“Our hardworking GPs and general practice teams have slogged through a particularly challenging few years on the frontline of COVID-19 and the vaccine rollout and certainly don’t need any more difficulties on their plate. We are managing patients who delayed or avoided screenings and consults during the pandemic and helping those with mental health concerns and that is where our focus should be, not on complex tax liabilities.

“RACGP Queensland has been meeting regularly with the Queensland Revenue Office to clarify the payroll tax situation for GPs and our teams. Our aim from day one has been to resolve the payroll tax issues threatening the viability of general practice in Queensland.

“I can now report that we have been making quiet but steady progress. Practices are not completely out of the woods yet, but the Queensland Revenue Office has made it clear that there are no changes in the application of payroll tax law in Queensland following the New South Wales Civil and Administrative ruling and there is no plan to specifically focus on medical practices for unmet payroll tax obligations. Instead, the office has said that they are increasing payroll tax surveillance across the entire business community due to improved detection and coordination, but general practices have not been, and will not be, singled out or targeted in any way.

“The Queensland Revenue Office has provided written confirmation that it intends to work with the RACGP to provide a public ruling regarding the application of payroll tax. This will provide a benchmark against which practices can measure themselves to ensure compliance. Additionally, they have agreed to work through the contract and operational provisions with the RACGP to provide additional clarity for practices around payroll tax. That is so important because what our members need is certainty.”

RACGP President and Mackay-based GP Dr Nicole Higgins said that future of general practice care in Queensland was at stake.

“We must get this right or many patients across Queensland will not be able to find a GP with their doors open willing to offer care,” he said.

“The RACGP has made it clear that a sudden change in the application of payroll tax applied to contracting GPs will threaten general practice in the state. What the Government needs to understand is that the 4.7% payroll tax rate is higher than the profit margin of most practices.

“Therefore, its application renders practices instantly unprofitable and unsustainable. Worse than that, the tax is being applied retrospectively for up to five years and so this could result in many practices becoming insolvent and having to close immediately. Make my words – we cannot and will not let that happen.”

Dr Willett said that the RACGP would continue to work closely with the Government.

“The RACGP continues to seek clarity regarding payroll tax applicability for various GP business models,” he said.

“There is precedent for this given that practices are already exempt from GST as healthcare providers. I strongly believe that a similar exemption from payroll tax for contracting doctors makes sense.

“Most hospitals run as either public utilities or charities and are therefore exempt from payroll tax and this creates an uneven playing field. If practices are subject to this tax, they will be unable to afford to continue providing care to the community, which will potentially channel patients into more expensive hospital care. The RACGP will continue to advocate strongly so that practices aren’t unfairly burdened by these taxes and for an exemption similar to the GST exemption. At a bare minimum, there should be no retrospectivity in the application of payroll tax, and practices need to be given certainty regarding how to become compliant. The fight continues and we will not give up because our members deserve nothing less.”

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