Doctors say tax office orders to cough-up could prove fatal

Doctors are warning Medicare bulk-billing is on the chopping block and hundreds of GP clinics face the axe if they are unable to stop a new Queensland Government payroll tax grab aimed at medical practitioners.

Nov 09, 2022, updated Nov 11, 2022
Doctors say a trial to give more prescribing power to pharmacists is "murky". (Photo: ABC)

Doctors say a trial to give more prescribing power to pharmacists is "murky". (Photo: ABC)

Peak medical group AMA Queensland is hoping it can emulate the forces of those who defeated the Palaszczuk Government’s unpopular land tax and force a backflip on a new approach to payroll tax that is threatening to send doctors to the financial wall.

AMA Queensland (AMAQ) says more than 80 per cent of GP clinics across Queensland will be subjected to the tax change, calculating that some struggling practices are being forced to cough up $3 million in retrospective tax bills applied without warning.

The shock claims from the Queensland Revenue Office (QRO) come after the NSW Civil and Administrative Tribunal ruled in July that doctors were a necessary part of a clinic’s business, and therefore subject to payroll tax.

AMAQ president Maria Boulton said clinic owners are reeling because they never expected to have payroll tax claimed for doctor billings, because they do not pay the wages of their GPs, nor their superannuation, leave or other entitlements.

She said GPs were employed under contractor arrangements using their own ABNs, with the clinic owner providing the premises, plant and equipment, billing services, reception, and administrative and allied health staff.

She has accused the Queensland government of changing its own rules in line with the NSW ruling that will make bulk billing unaffordable, send some clinics broke and increase the capacity pressures on hospital emergency departments.

“It is simply not viable for practices to continue bulk billing while having to pay unexpected bills of millions of dollars in some cases,” Boulton said in a statement.

“Bulk billing will disappear completely and patients will go to emergency departments instead, overwhelming hospitals.”

Boulton said the Queensland Revenue Office had refused AMAQ’s requests to discuss the changes.

The tax office denies it has changed any payroll tax arrangements for GP clinics for 14 years, suggesting more clinics are being picked up by compliance actions.

“QRO has reviewed the NSW decision and has not identified any aspect that it considers changes the scope, practice or approach to payroll tax in Queensland,” the QRO said in a statement.

“The treatment of Queensland medical practices in relation to payroll tax has not changed since 2008.”

Treasurer Cameron Dick has also moved to hose down the AMAQ’s warnings, telling reporters in Brisbane that doctors were not being specifically targeted, but were being captured as part of a wider compliance audit of contractors in other industries.

He said compliance checks were paused during the height of the Covid pandemic to give businesses a break, but were now returning to normal in line with the re-opening of the Queensland economy.

He said the QRO had uncovered 71 compliance issues so far this year, with only four connected to GP clinics, suggesting the medical sector was a small minority impacted.

He also suggested that fellow peak doctors’ group, the Royal Australian College of General Practitioners (RACGP), had raised no concerns with the QRO’s auditing regime after receiving correspondence from QRO acting commissioner Amy Rosanowski clarifying its interpretation of the State Government’s payroll tax legislation.

Attempts to contact the RACGP Queensland office were unsuccessful, but the body’s head Melbourne office later released a statement saying they were helping their members to understand their payroll tax liabilities.

Brisbane GP and clinic owner Aaron Chambers said he disputed the defence that nothing had changed with the QRO’s auditing framework.

“If there’s been no change then why am I getting tax bills that I’ve never received before,” Chambers said.

“We take our legal and tax obligations to the community seriously. All our legal advice was that we are fully compliant with our obligations, and that payroll tax does not apply to independent GPs.

“We are more than happy to pay our payroll tax liability for our employees – our reception staff and other employees – but being forced to pay payroll tax on our customers’ earnings is completely unreasonable.”

Earlier this year, he received a letter from the Queensland Revenue Office advising him of a liability and giving him a fortnight to respond. He was then issued with a bill going back three years, which swallowed up the practice’s profit for those years and put further expansion into doubt.

“This bill means patients are going to have to pay more, and it is absolutely unviable to continue bulk billing if this is applied. This is a tax on patients seeing their GP,” he said.

Boulton said the tax grab came at a time when GP clinics were under immense financial pressure, with Medicare rebates to patients not in step with the rising costs of providing medical care costs rising 10-15 per cent during the pandemic.

The AMAQ has called for the state government to give GP clinics payroll tax exemptions, which is being considered by the NSW government.

“If NSW introduces an exemption and Queensland doesn’t, our clinics will be at a competitive disadvantage and GPs will move interstate,” Boulton said.








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