Payroll tax amnesty for SA

3 minute read

GPs in South Australia, as in Queensland, get a year-long stay of execution for payroll tax audits.

General practices in South Australia have been given a year’s head start to get their payroll tax in order, as the state government signs off on a temporary audit moratorium.

Similar to the Queensland grace period announced in February, practices that believe they might have a payroll tax exposure can register with the SA government for the assurance it will not audit them for payroll tax compliance until after June next year.

Come July 2024 though, practices that put their hand up for the amnesty program can expect RevenueSA to take a close look at whether they’re still liable for payroll tax.

The state has also agreed not to perform retrospective audits on practices, according to RACGP SA chair Dr Sian Goodson, meaning that there will be no mega five-year tax bills of the kind seen in Queensland late last year.

Payroll tax emerged as a threat following the NSW Civil and Administrative Tribunal’s ruling on Thomas and Naaz, which clarified the meaning of a relevant contract in a medical centre setting.

Because of harmonised tax laws in the eastern states, the interpretation applies everywhere in Australia bar WA.

In short, the ruling rectified a common assumption that contractor doctors are generally not counted as practice employees and therefore the practice does not need to pay payroll tax on them.

There are still some circumstances where contractor doctors are not considered employees, but it is understood that a large swathe of practices are now exposed should they be audited by a state revenue office.

Payroll tax is roughly 5% of turnover, equal to the profit margin on most GP practices.

No SA practices have been audited following the Thomas and Naaz ruling so far, but Dr Goodson told The Medical Republic that she believed they were about to begin.

“It’s a huge relief, because if we had started having audits or big bills for retrospective tax, it would have literally sent many practices bankrupt,” she said.

“The important thing now is to get clarity for everyone, so they can plan for next year and look at their business structures and where their liabilities are.”

Practices have until the end of September to register with the SA Treasury in order to be granted amnesty under the arrangements.

The practices which sign up for amnesty will be able to work with RevenueSA directly to get payroll tax-compliant by the end of the 2023 financial year.

TMR understands that practices will be required to provide some wage information to RevenueSA as part of the amnesty arrangements.

Any practices that don’t register run the risk of being audited in the next year and potentially receiving a tax bill for noncompliance.

Despite ongoing campaigning from the RACGP and AMA, Queensland and SA are the only two states to have introduced any kind of concessions.

WA is the only other outlier, in that it is not affected by Thomas and Naaz and has told TMR previously that it generally considers GPs to be contractors.

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