Here’s what happens if you are caught, and the one structure that still works.
Before you read further, take the two-minute self-assessment checklist in our companion article here. It tells you in two minutes which parts of this article apply to you, and is suitable for doctors, allied health practitioners, practice owners and managers.
More detailed multi-regime checklists for practices and practitioners are linked at the bottom of this article.
In 60 seconds
- On 7 May 2026, the ATO confirmed it is now actively reviewing income-splitting structures used by doctors and allied health practitioners under Practical Compliance Guideline PCG 2025/5. The deadline to fix non-compliant arrangements is 30 June 2027.
- A full-time GP billing $300,000 a year and splitting income to a non-working spouse and a bucket company faces approximately $600,000 in tax, penalties, GST input tax credit clawback, superannuation guarantee, Fair Work back-pay entitlements, WorkCover, payroll tax and ABN withholding across Dr Smith and the centre over four to five years if caught.
- The arithmetic scales up or down with billings.
- The fix is structural. Revert from a practice company or family trust that receives and splits your clinical income, to operating as a self-employed practitioner whose clinical income is received and taxed in your own hands.
- Any income splitting is then confined to a separate service trust that sells practice management support to you and other practitioners at a commercial percentage of cash received.
- That is the tenant doctor model – federal authority: Phillips v FC of T (1978). Payroll tax authority: Queensland Revenue Office Public Ruling PTAQ000.6.1.
- Service trust business profits, not your clinical income, are what can legitimately be split or retained under PCG 2021/4, the professional firm profit allocation framework.
- This applies equally to physiotherapists, psychologists, optometrists, dentists, podiatrists, occupational therapists, exercise physiologists and dietitians. Lower billings do not exempt the structure, the test is structural not numerical.
- The detailed worked example, the dollar breakdown split between Dr Smith and the centre, and the authorities are below.
- After 30 June 2027, the Part IVA transitional concession is gone and back tax, penalties and interest apply to every year still within the amendment window.
What has just happened
The ATO is escalating compliance action on personal services income alienation. Translation: if a practitioner’s clinical work is being taxed in anyone’s hands other than the practitioner’s, the ATO wants to know why.
The legal hook is Practical Compliance Guideline PCG 2025/5, issued in November 2025. It tells the ATO when to apply Part IVA, the general anti-avoidance rule, to doctors, dentists, physiotherapists, psychologists, optometrists and other professionals who pass the personal services income tests but split or retain clinical earnings through a company or trust.
Many practitioners have been told for years that passing the PSI tests means they are safe.
They are not. PCG 2025/5 makes that explicit. The High Court said the same thing 41 years ago in the Three Doctors case, FCT v Gulland [1985] HCA 83.
This is not generic scaremongering.
The Commissioner’s worked examples in PCG 2025/5 are squarely directed at medical practitioners, and the companion ruling PCG 2021/4 (Allocation of professional firm profits) explicitly walks through a medical practitioner example showing what profit allocations the Commissioner accepts and what he treats as high risk.
The same framework applies, by analogy, to dentists, physiotherapists, psychologists, optometrists and other allied health professionals. The medical and allied health professions are the named audience.
What happens if you are caught
This is not theoretical.
If the ATO reviews your structure and concludes you have alienated personal services income, or treated an employee-like worker as a contractor, the practical consequences are:
- Back tax at your marginal rate on every dollar of clinical income that was diverted to a spouse, bucket company, or family member. The lookback is up to four years for individuals, six years for entities with significant diversion.
- Penalties of 25%-75% of the shortfall, depending on whether the ATO classifies the position as reasonable, lacking reasonable care, reckless, or intentionally disregarding the law.
- General Interest Charge compounding daily on the unpaid tax. From 1 July 2025, GIC is no longer deductible, so the effective cost is higher than it used to be.
- GST clawback of up to five years on contractor payments. If you are a deemed employee-like subcontractor, you should have been charging 10% GST on every payment received from the centre. The ATO can claw that GST back five years deep.
- GST input tax credit clawback on service fees. Separately, if your practice company or trust has been claiming GST input tax credits on the service fees paid to the centre, the ATO can require those refunds to be repaid up to five years back where the arrangement is recharacterised. On a typical $105,000 annual service fee to a centre that is GST-charging, that is $10,500 a year in refunds the ATO can reverse. Five years of that is more than $50,000.
- 12% superannuation guarantee on contractor payments. Under TR 2023/4 and the Moffet line of cases, a centre paying a deemed employee-like contractor is also on the hook for superannuation guarantee. That liability sits with the centre, but it routinely becomes the contractor’s problem when fee structures are renegotiated downwards to pay for it.
- Fair Work back-pay entitlements. If the contractor is reclassified as an employee, the centre owes the practitioner the National Employment Standards entitlements that were never paid: four weeks paid annual leave per year, 10 days personal and carer’s leave per year, public holiday pay, and where applicable long service leave, notice pay and redundancy. On a $195,000 notional wage that is roughly $30,000 per year in unpaid leave entitlements, with a back-pay lookback of up to six years. Separately, civil penalties under the Fair Work Act for sham contracting reach $93,900 per breach for an individual and $469,500 per breach for a body corporate, and the Closing Loopholes No. 2 Act 2024 has introduced criminal wage theft penalties as well.
- WorkCover unpaid premiums and penalties. The centre should have been registered for workers compensation insurance on the practitioner’s notional wage. On $195,000 at a typical medical practice rate of two per cent, that is roughly $4000 per year in unpaid premiums, plus penalties for non-registration. If the practitioner was injured during the unregistered period, the centre may also carry the full uninsured liability for the claim.
- ABN cancellation. The ATO is actively running its ABN integrity program. If your contractor arrangement is in substance an employee relationship, you are not carrying on an enterprise, and the ATO can and does cancel the ABN. Quoting a cancelled ABN to invoice is illegal, and once it is cancelled the payer is legally required to withhold 47 per cent from every payment under the no-ABN withholding rules.
- Loss of the Part IVA transitional concession if you do nothing before 30 June 2027. Until then, a genuine attempt to move to a low-risk arrangement protects you. After 30 June 2027, that shield is gone.
State revenue offices are running in parallel. The same arrangement that attracts Part IVA federally is the one that triggers payroll tax under Thomas and Naaz at the state level.
Fix one regime in isolation and you walk into the next. The flow-on for practitioners who suddenly have to start charging GST, paying back super, and finding a cancelled ABN is described here.
Worked example
Meet Dr Smith. Full-time GP. Bills $300,000 in patient fees a year. Works at Our Doctors Medical Centre. Her accountant set her up with Smith Medical Pty Ltd six years ago to save tax. The arrangement looks like this:
- The centre keeps 35% of billings as a service fee, $105,000. Dr Smith’s company receives $195,000.
- Smith Medical Pty Ltd pays Dr Smith a $90,000 salary, distributes $55,000 to her non-working spouse, and retains $50,000 in a bucket company at the 25% corporate rate.
- Dr Smith’s name and photo are on the centre’s Our GPs page. The centre takes the patient bookings.
- The service agreement says the service fee is calculated on the centre’s retained billings, not on Dr Smith’s cash received.
The ATO reviews her arrangement under PCG 2025/5. Here is what it costs her, in plain numbers, across a four- to five-year lookback if she does nothing.
| Cost item | Dr Smith | Medical Centre |
| Federal income tax shortfall (PSI reattributed at marginal rate, less tax paid by spouse and bucket company), $17,300 per year over four years | $69,200 | — |
| ATO penalty at 50% (lacking reasonable care) | $34,600 | — |
| General Interest Charge (compounding daily, no longer deductible from 1 July 2025) | $20,000 | — |
| GST input tax credit clawback on service fees ($10,500/year, five-year lookback) | $52,500 | — |
| ABN cancellation, going forward (47% withholding on $195,000 annual flow, per year until reinstated) | $91,650 / yr | — |
| Superannuation guarantee (12% on $195,000 × 5 years, with SG charge penalty and interest) | — | ~$234,000 |
| Payroll tax (state rate 4%-5% on $195,000 × 5 years, plus penalty) | — | ~$50,000 |
| Fair Work back-pay: annual leave (four weeks/year × 4 years on $195,000 notional wage) | — | ~$60,000 |
| Fair Work back-pay: personal and carer’s leave (10 days/year × 4 years) | — | ~$30,000 |
| Fair Work back-pay: public holiday pay (11 days/year × 4 years) | — | ~$33,000 |
| WorkCover unpaid premiums (~2% on $195,000 × 5 years) plus non-registration penalties | — | ~$20,000 |
| Subtotals | $176,300 + ABN withholding | ~$427,000 |
| Combined total across Dr Smith and centre over 4 to 5 years | ~$600,000 |
Approximately $600,000 across Dr Smith and the centre over four to five years.
That is two years of Dr Smith’s gross billings, gone.
The centre’s column does not stay with the centre. In practice, it flows back to Dr Smith through reduced service fees, terminated arrangements, or a renegotiated commercial position.
On top of all of the above, Fair Work civil penalties for sham contracting can reach $93,900 per breach for an individual and $469,500 per breach for a body corporate, and the Closing Loopholes No. 2 Act 2024 added criminal wage theft penalties.
The penalty rate, the SG charge calculation, the GST clawback, the Fair Work entitlement calculation, the WorkCover premium rate and the state payroll tax rate all vary with the facts of each case.
The figures above are realistic mid-range estimates for an arrangement that fails on the merits, not minima or maxima. The point is the order of magnitude, not the precise number.
What compliant Dr Smith looks like
If Dr Smith had been operating as a genuine tenant doctor through those four years, her exposure on the same $300,000 of patient billings would be zero. Here is the side by side.
| Aspect | Non-compliant Dr Smith | Compliant Dr Smith (tenant doctor) |
| Service fee structure | Centre keeps 35% of $300,000 billings | Dr Smith pays centre 35% of cash she receives |
| Clinical income destination | Routed through Smith Medical Pty Ltd | Received personally as PSI |
| Spouse distribution | $55,000 of clinical PSI to non-working spouse | $0 of clinical PSI to spouse |
| Bucket company retention | $50,000 of clinical PSI retained at 25 per cent | $0 of clinical PSI retained |
| Patient-facing brand | Centre’s Our GP Dr Smith page | Dr Smith’s own website and booking link |
| ABN status | At risk of cancellation | Active, quoted on every invoice |
| Income splitting available | Through clinical PSI (illegal under PCG 2025/5) | Through service trust profits (legitimate under PCG 2021/4) |
| 4-year exposure | ~$176,000 direct, ~$600,000 combined | $0 |
The same arithmetic applies, with different baseline numbers, to physiotherapists, psychologists, optometrists, dentists, podiatrists, occupational therapists, exercise physiologists, dietitians and other allied health practitioners working through a service trust or practice company.
The structures are identical, the legal regimes are identical, the consequences are identical.
What non-compliance looks like
You are probably in the ATO’s sights if any of these describe you:
- You bill through a company or trust and distribute meaningful amounts to a spouse, parent, or adult child who does not work in the practice.
- You retain clinical profits in a bucket company at the 25 per cent corporate rate while drawing a modest salary for yourself.
- Your accountant set you up with a service trust, but the trust’s only customer is you, and the only thing it sells is the right to bill patients.
- Your service trust charges a fixed lump sum instead of a commercial percentage of fees collected, or the percentage was last benchmarked years ago.
- You have no separate website, no separate brand, no separate ABN, no separate professional identity from the clinic you work at.
If two or more of these apply, you are exposed.
What compliance looks like
The legitimate path runs through a properly structured service trust that the practice owners hold, and tenant doctor arrangements with the practitioners who work in the practice.
In Phillips v FC of T (1978) 78 ATC 4361, a firm of chartered accountants successfully split profits through a service trust that provided premises, administration and equipment to the partners on commercial terms.
The Full Federal Court held the arrangement was a genuine business and the service fee deductions stood. That decision is the foundation federal authority for service trust structures across every profession in Australia, including medicine and allied health.
The ATO accepted Phillips in IT 276 and now codifies its administrative approach in TR 2006/2.
On the payroll tax side, the Queensland Revenue Office Public Ruling PTAQ000.6.1 (Relevant Contracts, Medical Centres) expressly recognises a genuine tenant doctor arrangement as outside the relevant contract provisions, and the Queensland ruling has been extended by analogous QRO guidance to allied health centres.
That Queensland position has not been explicitly adopted by every other state revenue office. NSW, Victoria, South Australia, Western Australia and Tasmania have so far stopped short of issuing matching guidance, despite the model’s sound medico-legal and commercial foundations.
In our considered view, the structural distinction at the heart of the model, that the patient pays the practitioner and the practitioner then pays a commercial percentage of cash received back to the service trust, is defensible nationally on those same foundations.
Practitioners and practice owners operating outside Queensland should obtain state-specific advice, document the arrangement carefully, and treat the Queensland ruling as a persuasive but not yet binding national benchmark.
The affirmative authority for splitting service trust profits, as opposed to clinical income, is Practical Compliance Guideline PCG 2021/4 (Allocation of professional firm profits). PCG 2021/4 sets out the ATO’s risk framework for distributing the business profits of a professional firm to associated entities, including discretionary trusts and corporate beneficiaries. PCG 2025/5 polices the line between clinical income (which is yours) and service trust profits (which are the business’s). PCG 2021/4 then governs how the service trust’s profits may legitimately be allocated.
The two work together. Get the structural division right and you have a defensible path to both.
A genuine tenant doctor or tenant practitioner has all of these features. The list is also the practical self-audit.
- Your own website, your own HotDoc or Healthengine page, your own social media. The clinic is not your shopfront. You are.
- You set your own fees. You are never forced to bulk bill or to cap your private fees. Mixed billing, private billing, bulk billing, your call, patient by patient.
- Your own ABN, your own GST registration, your own professional indemnity, your own AHPRA and Medicare provider number.
- You set your own hours, your own patient mix, your own leave. The clinic does not roster you.
- The patient pays you. You then pay the clinic a commercial percentage of what you have actually received, not what was billed. That structural distinction is the one Queensland Revenue Office Public Ruling PTAQ000.6.1 calls out as the hallmark of a tenant arrangement.
- If you leave, you take your patient list with you. No restraint clause prevents you from contacting your own patients.
If you have your i’s dotted and your t’s crossed, your own website, your own ABN, your own fees, your own bookings, a commercial percentage service fee calculated on cash you have actually received, a signed and accurate service agreement that matches the day-to-day reality, and contemporaneous documentation across all 10 regimes, then a genuine tenant doctor model arrangement is simply business as usual.
No restructure trigger, no transitional concession to chase, no audit anxiety to live with. The work has already been done in how the practice operates. The documentation simply records the structural reality. The compliance burden is not extra work, it is the work.
We explain the model in plain terms here and here.
Related
The advertising trap
The single most common way to lose tenant status is the easiest to fix. It is the centre’s website saying Our Doctors, Our GPs, Our Physiotherapists or Our Psychologists, with the practitioners listed underneath.
In FCT v Fortunatow [2020] FCAFC 139, the full Federal Court held that the unrelated clients test in section 87-20 of the Income Tax Assessment Act 1997 requires a direct causal connection between the practitioner’s own public advertising and the patient’s decision to engage.
Mr Fortunatow advertised himself on LinkedIn, but his work came through recruitment agencies that broke the chain; the High Court refused special leave.
The same logic catches any practitioner whose bookings flow through the centre’s Our Doctors page: the centre is the intermediary, the clinical income flows from the centre’s marketing, and every clinical dollar can be reattributed to the practitioner with no income splitting permitted.
The medico-legal flipside is just as serious.
AHPRA, MIGA, Avant and your indemnity insurer will look at that website if there is a complaint or claim.
After Bird v DP [2024] HCA 41 expanded the vicarious liability net, a centre advertising Our Practitioners that does not actually employ them is gifting the plaintiff’s lawyer the holding-out argument before the file is opened.
The fix is structural and ongoing.
Each practitioner advertises themselves on their own website, drives their own bookings, keeps their own patient-facing brand.
The centre, if it has a website, describes itself as a facility where independent practitioners are co-located, with each practitioner’s own booking link.
Promote your own website. Update it. Drive patients to it. That is the evidence the ATO and the state revenue offices will look for.
If you want to part own or fully own a practice
Two income streams, kept separate.
As a working clinician, your clinical income is yours, taxed at your marginal rate in your hands, regardless of how clever the structure looks on paper. That is the lesson of the Three Doctors case (1985), the PSI rules (2000), and PCG 2025/5.
As a practice owner, your business return is what the service trust earns from running the practice: lease, fit-out, equipment, management systems, brand, and the receptionists, practice manager, nurses and allied health assistants it employs.
The service trust charges tenant practitioners a commercial percentage of cash collected. That percentage is business income earned from the service trust’s enterprise, not your personal services income. The Federal Court endorsed the distinction in Phillips v FC of T; the ATO accepts it in IT 276 and TR 2006/2.
That second stream is the legitimate income-splitting pathway.
Service trust profits, after real costs, can be distributed through a discretionary trust or paid as dividends from a corporate beneficiary to family members under PCG 2021/4.
What is being split is the business return, not the practitioner’s clinical work. Part-ownership is then a question of who holds units in the service trust. Two, three, or 10 owner-practitioners can hold units, each drawing their own clinical income as a tenant practitioner, each receiving a share of service trust profits in proportion to their unit holding.
Substance, not labels.
Multiple tenant practitioners using the centre (including non-owners, so the service trust has unrelated clients). Real employees on the service trust’s books. Genuine commercial service fees, benchmarked annually under TR 2006/2. A service agreement that reflects what actually happens day to day. Each practitioner running their own website.
Get those right and you can own or part-own a practice with no Part IVA exposure. Get them wrong and the ATO treats the service trust as a thin paint job over the practitioner’s clinical income.
Four things to do this month
You do not need a 50-page tax opinion. You need to start.
1. Check your ABN today. Go to abr.business.gov.au, enter your ABN, and confirm it shows as Active. If it has been cancelled by the ATO under the integrity programme, and many GP and allied health contractors have been caught by this without knowing, you have been invoicing illegally, and the centre is legally required to withhold 47 per cent of every payment to you. Five minutes. Fix it now.
2. Look at how you are advertised online. If the centre’s website calls you Our Doctor or Our Practitioner, fix it. Get your own website live, with your own booking link, your own fee schedule, your own clinical interests. The centre’s website should describe the centre as a facility where independent practitioners are co-located, with each practitioner’s own booking link.
3. Pull out your service agreement and your last tax return. If the agreement says service fee on billings retained by the centre, or your tax return shows clinical income flowing to a spouse or bucket company, you are in scope. Book a 30-minute review with an adviser who knows the multi-regime landscape.
4. Restructure your service fee to a commercial percentage of cash received by the practitioner. Benchmark it against TR 2006/2. Document the commercial rationale in writing this year, not next year. The ATO has been clear that contemporaneous records are what convert the transitional concession into a defendable position.
What the transition involves
Reverting from a practice company or family trust to operating as a self-employed practitioner is not a same-day exercise. The unwind itself triggers tax events that need to be planned around, not stumbled into.
- CGT. Transferring practice goodwill, patient lists or other intangibles out of the company or trust may trigger CGT. Division 152 small business concessions are usually available, with planning and valuations.
- GST. Asset transfers can be taxable supplies. The subdivision 38-J going-concern exemption usually covers a genuine practice transition with the right documentation.
- Division 7A. Clear or refinance any directors’ loans, unfranked dividends and unpaid present entitlements under section 109N complying loan terms before wind-down.
- Service agreement novation. Cancel the existing centre agreement and put a new one in your personal name.
- AHPRA, Medicare and indemnity. Update provider numbers, billing arrangements, professional indemnity and AHPRA notifications to the new structure. None of this is automatic.
- Bookkeeping. New TFN, GST, BAS, payroll tax and superannuation registrations as relevant.
A clean transition from a typical practice company or family trust structure to a self-employed practitioner plus a separate service trust takes between three and nine months of professional work, depending on the complexity of the existing entities and the cooperation of the centre.
Started now, that timing fits comfortably inside the 30 June 2027 deadline. Started in early 2027, it does not.
If your centre won’t change the agreement
Many practice owners are good operators trying to do the right thing, and many will read this article and welcome the analysis.
The conversation below is for the practitioner whose centre is not in that group.
If your principal or practice owner is open to fixing the structure, the four practical actions above plus a copy of this article in their inbox is usually the right next step.
Many contractor practitioners at consolidator groups and large medical centres do not have that luxury. The centre presents a take-it-or-leave-it service agreement, the practitioner signs, and the centre is unwilling to amend it for any individual practitioner.
If that is your situation, here is the honest position.
First, the centre has the same compliance exposure you do, often greater. The payroll tax, superannuation guarantee, vicarious liability and Bird v DP risks all sit primarily on the centre, not you.
A well-presented written request, with a brief multi-regime explanation, frequently moves the centre because it is in their interest as much as yours. Health and Life’s clients regularly use a standard template letter for this purpose.
Second, if the centre still refuses, your three real options are:
- Negotiate the most defensible variant of the existing template (own website, own ABN, own fees on each invoice, your name on patient correspondence, your own bookings driving at least some patient flow), and document everything.
- Move to a centre that operates a genuine tenant doctor or tenant practitioner model. There are now hundreds of these centres around Australia.
- Continue at the centre on the existing terms, knowing that you carry the residual federal income tax and PSI exposure personally, and that 30 June 2027 will pass without the transitional concession.
None of those options is comfortable, but a clear-eyed choice is better than a deferred one. The article you are reading exists so that you make that choice with the right information.
Ask your accountant these three questions
Most practitioners will take this article back to the accountant who set up their current structure.
The answer will almost always be: do not worry, you are fine. The accountant may genuinely believe that, or may be defending advice given five or 10 years ago. Before you accept the answer, put these three questions in writing and keep the response.
1. Have you assessed my arrangement against all 10 regimes, including payroll tax in every state where I or my centre operates, superannuation guarantee, Fair Work sham contracting, vicarious liability after Bird v DP, PSI and Part IVA under PCG 2025/5, WorkCover, fee-setting control, ACCC cartel conduct, AML/CTF Tranche 2 from 1 July 2026, and GST and ABN clawback, or have you only looked at one of those?
2. Have you reviewed my arrangement under PCG 2025/5 specifically, and are you prepared to write me a Professional Undertaking confirming it sits in the low-risk zone of the ATO’s risk framework? If yes, when can I have it? If no, why not?
3. Is my service fee benchmarked under TR 2006/2 in the past 12 months, with a documented commercial rationale on file, and is the fee calculated on cash received by the practitioner rather than billings retained by the centre? Can you show me the benchmarking and the rationale?
If the answer to any of these is no, qualified, or another reassurance without a written answer, the safest working assumption is that nobody has actually done the work.
Get a second opinion from a multi-regime adviser before 30 June 2027.
No evidence, no defence
The single phrase every practitioner should write on the cover of their compliance file is this – “absence of evidence is not evidence of absence”.
To the ATO, the state revenue office, AHPRA, MIGA, Avant and your indemnity insurer, no evidence reads as no defence.
A tenant arrangement is not a label you stick on a service agreement. It is a documented operating reality.
A signed service agreement that matches a different practice on the ground will not save you. A bank reconciliation that cannot tie patient receipts back to the practitioner’s tax invoice and BAS will not save you. A vague accountant’s letter saying the arrangement looks fine will not save you.
Ten regulatory regimes are now running in parallel, each with their own evidence demands:
- Payroll tax (Thomas and Naaz, PTAQ000.6.1, PTASA003)
- Superannuation guarantee (post-Moffet, TR 2023/4)
- Fair Work sham contracting (Closing Loopholes No. 2 Act 2024)
- Vicarious liability (post-Bird v DP [2024] HCA 41)
- Personal services income and Part IVA (PCG 2025/5)
- WorkCover and workplace health and safety
- Fee-setting control and Medicare compliance
- ACCC cartel conduct (Competition and Consumer Act sections 45AD to 45AG)
- AML/CTF Tranche 2 obligations (from 1 July 2026)
- GST and ABN clawback
Ten regimes, one piece of contemporaneous paper each, that is the minimum standard.
Single-regime advice is how practitioners end up paying tax twice, once to the ATO and once to the relevant state revenue office, and how practice owners end up with payroll tax, superannuation guarantee and a vicarious liability claim flowing from the same arrangement.
The tenant doctor model, and its allied health counterpart the tenant practitioner arrangement, is one of the very few structures that addresses all 10 regimes at once.
This is what the Health and Life Professional Undertaking is for. It is a written sign-off from your accountant and your lawyer confirming they have assessed your arrangement against each of the ten regimes, not just one.
If your advisers will not sign it, or cannot, that is information you need. The full framework is set out here.
Bulk billing and fee control
Many GPs think bulk billing is a clinical and ethical question.
It is also a compliance question, and the answer is rarely neutral.
A tenant practitioner sets their own fees, patient by patient. A practice that forces or strongly encourages bulk billing across all its GPs is, in substance, controlling the fee.
The same point applies to allied health.
A physiotherapy clinic that caps private fees at a centre-set rate, or that requires all practitioners to accept WorkCover, DVA or NDIS scheduled fees without choice, is also exercising fee-setting control. So is a dental centre that runs centralised treatment plan pricing across all chair-time providers.
Fee-setting control is one of the strongest indicators that the centre is the provider, not the practitioners. It sends the arrangement straight back into payroll tax, superannuation guarantee, vicarious liability and PSI territory.
The collision between bulk-billing incentives, the Bulk Billing Practice Incentives Program, allied health fee caps, and the 10 compliance regimes is set out here.
Do not skip that read.
Your next move
Three actions in three time horizons.
1. Today: take the relevant two-minute checklist above to confirm your current exposure.
2. This week: put the three accountant questions in writing to your existing adviser and keep the response.
3. This month: if you are exposed, commission a multi-regime review and a transition plan, so the work can actually be completed inside the 30 June 2027 window.
The earlier you act, the more options you have. After 30 June 2027 you are working without the Part IVA transitional concession, and a genuine attempt takes longer than a single phone call to assemble, so the practical deadline is well before the legal one.
David Dahm is CEO and Founder of Health and Life, a national chartered accounting and advisory practice serving medical and allied health practitioners since 1992. He is the co-author of the ATO Tenant Doctor public class ruling and Australia’s first national GP GST Guide.
Acknowledgement. I thank Lukasz Wyszynski of Hamilton Bailey Lawyers for assisting with this article.
This article is general advice only. It should not be relied upon other than as a basis for discussion with your own legal and accounting advisers. Ask your advisers before acting on any of the matters raised in this article. Liability limited by a scheme approved under Professional Standards Legislation.
