Think before you act – The Queensland Payroll Tax Amnesty

The Queensland Payroll Tax Amnesty

Are you a medical practice owner in Queensland who has not been paying payroll tax on your payments to contracted general practitioners?

Following the December 2022 QRO ruling, the Queensland Government announced a payroll tax amnesty would be applicable to medical centres making payments to General Practitioners (GPs). Now, any relief from the obligation to pay payroll tax is unsurprisingly welcomed by medical practices. However, the eligibility criteria for the amnesty limits the number of medical practices who will benefit. So…who is eligible, and what exactly for?

What is the Amnesty?

If your Practice is successful, you will not have to pay payroll tax on ‘payments made to contracted GPs up to 30 June 2025 and for the previous 5 years (i.e. 2018-25)’. [1]

Who is eligible?

According to the QRO website (as of 2 March 2023), “the amnesty may be available to medical practices that have:

  • not been paying payroll tax on payments to contracted GPs

  •   been, or currently are, subject to compliance activity in relation to payments to contracted GPs.”

And is not available to:

  •     “Other medical doctors or allied health professionals.”

  •     Medical practices that are already complying with payroll tax obligations

  •     New Medical Practices

  •     Non-Medical Businesses that are currently paying payroll tax on contractor payments.” [2]

This means that if you are just starting out as a medical practice, you need to pay payroll tax on your payments to contractors and are not eligible for this amnesty. You can find out more about that here.

Similarly, if you are already complying, this amnesty does not change your position, and you must continue to pay payroll tax to contracted GPs.

Why are they doing this?

The Queensland Government is doing this in response to the lack of awareness across the community that medical practices are liable to pay payroll tax on contracted general practitioners (GPs).

The ‘grey area’ and what to do?

Currently, it is unclear whether agreeing to the amnesty represents you inadvertently stating that your medical practice is making taxable payments to contractor Doctors, which may have future implications post-2025. Depending on your exact arrangement, you may not meet contractor provisions (i.e. you don’t want to be swept under the rug if you don’t have to be). Therefore, it is not recommended to rush to the register. 

After awaiting further details of the amnesty, The Queensland Government recently, as of 15 March 2023, approved the Administrative Arrangement Temporary payroll tax amnesty measure in relation to payments made to general practitioners under the relevant contract provisions, setting out the basis of which the payroll tax amnesty will be administered. To support the arrangement, Guidelines for Administration have additionally been released outlining certain operational aspects of the amnesty. 

While the Government has released these details, the amnesty continues to lack clarity as to whether agreeing to the amnesty terms will make you liable for payroll tax in the future. In addition, the administrative agreement is considered in conjunction with the Commissioner’s guidelines, which state such guidelines may be changed at the Government’s discretion ‘from time to time to clarify requirements.’

Therefore, we recommend a cautious approach, pressing pause and not expressing interest or registering until there is further clarification of terms by the Queensland Government. It is important, regardless of this amnesty, to be ahead of the game when it comes to your practice’s arrangements and the subsequent risk of payroll tax liability that you may be exposed to, so we recommend obtaining legal and accounting advice. 

I am definitely eligible, and I definitely want to apply. Can I do it now?

According to the recent administrative agreement, to apply for amnesty a medical practice must: 

  • Be a designated medical practice; 

  • Submit an expression of interest via the form on the QRO website by 29 September 2023;

  • Make a voluntary disclosure and, if not already registered for payroll tax, register for payroll tax in Queensland by 30 June 2025; and 

  • Comply with its ongoing payroll tax obligations after making the voluntary disclosure, including from 1 July 2025

You will then be contacted about the next steps. However, as emphasised above, we strongly recommend your first step to be seeking legal and accounting advice tailored to your practice before registering such interest.

How You Legal can help

You Legal can assist you with reviewing the Agreements you have placed, as well as creating new Agreements that have been updated following the payroll tax cases. If you have any questions about this, feel free to contact us today.

Disclaimer:
This article has been prepared by You Legal. This article is for general information only and it is important to consult an expert to seek expert advice for your specific circumstances. All reasonable care has been taken to ensure the accuracy of this information; however, no warranties are provided. You Legal does not accept any “liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice”. This information may be subject to change without notice.

Sarah Bartholomeusz