Additional Details

The Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAP 220 decision highlights how important it is to look a number of issues between the doctor and the practice. In this decision, Thomas and Naaz Pty Ltd was found to have owed the State almost $800,000 in retrospective payroll tax. This was due to payments to doctors being deemed by the Tribunal as assessable for Payroll Tax, as payments under a ‘Relevant Contract’. The flow of money was a key factor that resulted in the Payroll Tax Act being triggered (which is the section dealing with ‘relevant contracts’).  In practical terms, this means that owners of medical practices must be aware that they are at a higher risk of receiving a large retrospective payroll tax bill if their Agreements are not properly drafted and implemented. 

This case has highlighted some other practical issues in the manner in which this practice’s business was conducted and also some issues with the drafting of independent contractor agreements, which is very common in the industry.

For more information about the facts of the original case, and NCAT’s reasoning, you can read our blog article here: Independent Practitioner Arrangements: Payroll Tax Case.

1. We review your existing Agreement with doctors (if you have one);

2. We will provide you with written legal advice about the risks for your practice based on the Ruling(s) relevant in your state or Territory and provide our recommendations as to how to reduce those risks; and

3. We have a call with you to discuss the advice; and answer any queries you may have arising from the advice (of up to 30 minutes in duration).

*For the avoidance of doubt this advice does not extend to cross-jurisdictional issues or more than one State or Territory.  If you have a cross-jurisdictional medical practice, please contact us for a personalised proposal.

Frequently Asked Questions

If you are considering engaging You Legal to provide Legal Advice on Payroll Tax Rulings in your practice, here’s what you need to know:

The case of Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 259 and its subsequent appeals highlight the risk of paying payroll tax on payments made to contractors. However, payments to three contractor doctors did not attract payroll tax, and this had to do with the flow of money.  There are other aspects of this case that we will address in the advice, depending on your particular circumstances.

Legal advice can ensure that you are complying with all applicable laws and regulations and that the practice manager and practice owners are on the same page moving forward.

The above price is inclusive of a review of your existing Services Agreement, written legal advice following your respective state or territory’s payroll tax ruling and recommendations, as well as a phone call of up to 30 minutes duration. In this call, we will make sure you understand our advice and recommendations. For more details on the exact process and what’s included, see the ‘Once you purchase this Product’ section above.

Both! If you are starting out as a practice, we can review your proposed arrangements for doctors. If you are an existing practice, we can advise you on your current processes for doctors and make recommendations for you to consider what is going to work best in your medical practice.

Have a question?