Dentists join payroll tax fight

3 minute read

Queensland’s payroll tax ruling could also have severe negative implications for after-hours clinics, the RACGP warns.

The AMA has picked up a new ally in its quest to get an exemption from medical centres having to pay payroll tax.

The Australian Dental Association has announced it will back the medical association’s calls for National Cabinet to pass laws exempting medical centres from paying the state-based tax.

Last month, the Queensland Revenue Office released a public ruling detailing how it will interpret and apply relevant contractor provisions in relation to payroll tax in the wake of the Thomas and Naaz decision.

It effectively left very little room for clinicians to argue that they are not practice employees, even if they ostensibly work as a contractor under a personal ABN.

Having a practice-wide weekend or after-hours roster, for instance, will be counted as partial proof that a practitioner is an employee, rather than a contractor.

As RACGP vice president Dr Bruce Willett pointed out to NewsGP today, that aspect of the ruling makes it very difficult for any practice to run an after-hours service.

“For practices to conduct after-hours care, they have to have a roster – you can’t just say to someone ‘cover this after-hours time if you’d like to,’” he said.

Payroll tax works out to roughly 5% of gross earnings across most states.

GP practices, dental clinics, physiotherapy practices, radiology centres and any other healthcare providers that use a similar business setup are implicated as potentially being liable to pay the tax under the ruling.

“After the extremely stressful years of pandemic-related closures for the profession, this idea couldn’t be worse timed in terms of the impact it will have on the majority of our members’ 6000 practices and the flow on consequence of reduced access to care,” ADA president Dr Stephen Liew said.

“We’re therefore backing the AMA in strongly urging the National Cabinet to legislate an exemption to payroll tax.”

Failure to pass the legislation, he said, will result in dentists “reluctantly” passing on the cost of the 5% tax to their patients.

Having to pass on costs has already become a reality for GP clinics in Queensland, according to AMA Queensland president Dr Maria Boulton.

“We are seeing practices close every week in Queensland, particularly in regional and rural centres, due to financial pressures,” she said.

The added costs of payroll tax, Dr Boulton said, stands to wipe these clinics out for good.

Larger GP providers aren’t safe either.

The Primary Care Business Council, which represents GP corporates, told The Medical Republic that any increased cost burden applied to medical centre operators poses an “existential threat” to practice viability.

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