The RACGP Victoria faculty says it is aware of several practices on the receiving end of “concerning” state revenue office letters.
The RACGP is urging its Victorian members to seek independent accounting and legal advice if they have received an unexpected payroll tax bill from the State Revenue Office.
In an email to Victorian GPs earlier this week, faculty chair Dr Anita Munoz said the college had written to the SRO expressing its “deep concern” about the content of the letters, which “may prompt some members to pay more than they have to”.
According to Dr Munoz, the letters imply that practices owe payroll tax on their independent practitioners.
“To suggest such broad liability for payroll tax is not correct,” she told The Medical Republic.
“There are various factors involved in determining liability, including underlying business structures and the relationship between entities and practitioners, and this is why we are encouraging our members to get their own independent accounting and legal advice to determine their tax liabilities.
“We want to avoid a situation where some members may be intimidated into paying more tax than they should.”
She reiterated that the letters do not automatically mean that practices owe this tax.
“The RACGP has written to the SRO to represent our members’ concerns, and to make clear to the office that its communication, including information on its website, has not accounted for the diversity of practice models,” Dr Munoz said.
In Victoria, the GP payroll tax relief arrangements were split into three periods.
Until 30 June 2024, all GP practices and businesses could obtain relief – i.e. an amnesty – for any assessments related to payroll tax on payments to contractor GPs.
Between 30 June 2024 and 30 June 2025, Victorian GP businesses that had not received advice in the previous period that payroll tax was payable on their payments to contractor general practitioners from the SRO were also eligible for relief.
From 1 July 2025 onward, practices that had been told by the SRO in either of those previous two periods that their business structure incurred payroll tax on money paid to doctors could start claiming a payroll tax discount proportional to the total amount of money earned by bulk billing.
This excludes amounts paid for consumable items.
In May 2024, discussions between the SRO and multiple GP advocacy stakeholders left the RACGP under the impression that the state revenue office deemed all general practices in the state, irrespective of structure, to be liable for payroll tax on the income generated by contracted doctors.
Related
The SRO website now advises that all contracts between a doctor and an entity that conducts a medical practice are relevant – i.e. incur payroll tax – if the practitioner carries on a business of providing medical-related services to patients and the practice entity provides members of the public with access to medical services and engages a practitioner to supply services to the medical centre by serving patients on its behalf.
“Revenue Ruling PTA-041 also states that if a medical practice engages a practitioner to practice from its medical centre, or holds out to the public that it provides patients with access to medical services of a practitioner, it is likely the relevant contract provisions will apply to the contract with the practitioner unless an exemption applies,” the SRO website said.
The three approved exemptions cover instances where a doctor provides services for less than 90 days per year, a doctor ordinarily provides services to the public and where services are performed by two or more people.
The Victorian SRO declined to comment on the basis that it could not disclose correspondence with customers.