State Treasurer says most doctors at medical centres “are considered contractors running an independent business”.
WA takes GP payroll tax off the table
Western Australia has confirmed that it will stick with existing payroll tax provisions for GPs operating in medical centres as question marks hang over arrangements in other states.
The Royal Australian College of GPs said it had written assurances from the West Australian government that it did not intend to follow other states in making medical centres liable for payroll tax.
RACGP WA chair Dr Ramya Raman said the body had raised concerns with the state government after a key legal ruling in NSW last year classified GPs as employees, leaving hundreds of medical centres across Australia facing the prospect of large payroll tax bills.
The RACGP had since secured amnesty periods for GPs in South Australia and Queensland, and the letter from WA’s new deputy premier and Treasurer Rita Saffioti offered welcome reassurance.
The letter said that under WA’s existing payroll tax provisions most GPs working in medical practices under independent agreements “are considered contractors running an independent business”.
“The $1 million tax free threshold means the majority are not subject to payroll tax. The Western Australian Government does not intend to change these provisions.”
Dr Raman said the move was also good news for patients.
“The WA Government has listened to the RACGP and understands our concerns – this will be a relief for GPs across our state,” she said.
“Practices operate on thin margins, and if they are hit with an additional payroll tax bill, which can be hundreds of thousands of dollars, they will be forced to pass the costs on to patients. If patients can’t afford the gap fees, practices will close.
“This would put more pressure on WA’s already overstretched hospitals. It’s a nightmare scenario, and the WA government gets it.”
William Buck director in WA Trent Antonio also welcomed the news.
“William Buck have always been comfortable that the WA payroll tax legislation differs from the other states in certain key areas to distance WA GP practices from the recent payroll tax court judgements in NSW,” he said.
“However, the announcement from the WA government will be a welcome relief for a lot of WA GP practice owners who have been confused and anxious about what the recent activity in the other revenue state offices means for WA.”
“It is still important for WA GP practices to review their service agreements and the way they interact with their doctors to ensure they don’t unintentionally fall into the current WA payroll tax resume.”