AMA (NSW) President: State Government must act to save medical practices from payroll tax laws

A Victorian court decision on payroll tax has potentially placed GP and other specialist practices in danger of being forced to close, AMA (NSW) President, Dr Danielle McMullen, said.

“Standard procedure for many medical practices is for the practice to manage the money by receiving payment on behalf of the doctors and later distributing it to them.

“A decision by the Victorian Court of Appeal, in relation to a similar business model, demanded that payroll tax be applied to money before it is distributed to individual staff, despite the fact the money was only being held on their behalf.

“These practices are incredibly common throughout NSW and are now pretty much the standard for how medical care is offered outside hospitals.

“This decision would threaten their viability in the best of times due to the increased tax burden it places on them but during the COVID-19 pandemic is an especially poor time for this.

“A poor outcome from a tax audit because of this could also prove ruinous for a medical practice.

“The NSW Government needs to act on this quickly and reform payroll tax law in the state to prevent this from happening.

“If not, we could see medical practices, especially those in rural and regional NSW, being forced to close due poor economic viability or falling foul of a mistargeted law.

“NSW needs urgent payroll tax reform to prevent this,” Dr McMullen said.

Media contact: Lachlan Jones 0419 402 955