By omitting the term ‘tenant doctor’ from the sixth edition of Standards for general practices, the college may be leaving some practices exposed to the tax man.
Healthcare accountant David Dahm says the RACGP’s newly released draft standards may raise tax-related red flags for GP clinics. The good news is that it’s a relatively easy fix.
The 152-page draft of the sixth edition Standards for general practices was released for member consultation on Monday, featuring a revised structure and new criteria related to environmental sustainability, artificial intelligence and point-of-care testing.
But it’s the definition of “contracted members of the practice team (Contractors)” on page nine of the document which has drawn Mr Dahm’s attention.
The definition, as written in the draft standards, is “individuals who: provide specific services at the practice but are not directly employed by it; typically work under a service or consulting contract and have autonomy in managing their work; do not receive paid leave entitlements from the practice that employed members do, for example leave entitlements, superannuation”.
It goes on to clarify that the term “contractor” extends to “independent contractors, freelancers or [people who are] part of an external service provider”.
This wording, Mr Dahm told The Medical Republic, implies that GPs can only be contractors or employees, rather than tenant doctors.
“It potentially throws everybody under the tax bus, for want of a better word,” Mr Dahm said.
“They use the word contractor, almost normalising it, and words have meaning … in law, in tax, in accounting, the word contractor has a specific meaning.”
Over the last several years, successive legal cases and payroll tax audits have identified GP contractors as employees of a practice.
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Most recently, GP payroll tax implications were mentioned by judges at the Supreme Court of NSW in a decision in which rideshare service Uber owed payroll tax on its contractor drivers.
“The [RACGP standards offer] no other alternative meaning to ‘contractor’ which would imply an alternate arrangement, other than an employee or subcontractor arrangement, and that triggers income tax and payroll tax implications,” Mr Dahm told The Medical Republic.
The solution for many clinics has been to clarify that the practice itself is an administrative body, and the GPs are simply tenant doctors sharing resources like reception staff or practice nurses.
“If the definition mentioned tenant doctors or tenant GP arrangements … it would actually open a broader definition than a contractor definition,” Mr Dahm said.
“I’m a bit disappointed it hasn’t been appropriately addressed.”
Mr Dahm has already raised this issue with the college at multiple points, both in person and online.
The sixth edition standards are open for consultation until 28 September.
They are expected to be published in early 2026.
