South Australia’s state revenue office is in the process of contacting what the RACGP says is a “small number” of GP clinics which it believes may have miscalculated their bulk billing payroll tax exemption deduction.
The Medical Republic understands that a number of clinics that opted against participating in the payroll tax amnesty and exemption schemes are also fielding audits.
Since July 2024, GP clinics in South Australia have been eligible for a partial payroll tax exemption.
Practices that opted in can claim a deduction based on the proportion of services which were bulk billed compared to the total number of services.
The deduction only applied to payments made to contractor GPs, which the law views as “wages”; payments to practice administration staff and GP registrars were excluded.
With the program now having been in place for two years, RACGP SA chair Dr Siân Goodson said the tax office had contacted the college to say it would be beginning compliance activity.
“They were looking at a friendly approach, they’ve assured me,” she told The Medical Republic.
“A friendly approach to practices who they think may have been miscalculating the bulk billing exemption.
“They’re going with an educational approach to those practices that they think may have made some miscalculations, with a view to working with them to work out how they’ve been calculating it and, if they’ve made a mistake, giving them ways to rectify that.
“[The SRO is] not implementing fines, or anything like that.”
According to Dr Goodson, practices that have been found to have made an error will not be presented with a bill right away.
“Should they find issues, their intention – they assure me – is to put [practices] onto payment plans to pay it back over the coming months rather than asking for payments or fines upfront,” she said.
“We’ve very much pushed that this is going to be a very difficult time for practices that get contacted, and some of those practices, of course, may not have made a mistake.
“It’s an opportunity for those discussions, I think, rather than assuming there’s going to be a problem.”
Separately, she said, RevenueSA had also signalled that it would be “looking at” practices that did not sign up for the amnesty.
Some GPs may have chosen not to participate based on the belief that their practice structure was a true administrative entity set up, wherein GPs were not considered contractors and were instead considered tenants who pooled resources to rent rooms and hire administration staff.
An audit from RevenueSA would essentially stress-test whether these clinics were set up properly.
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David Dahm, an accountant specialising in primary care business, said the take-home message was that all South Australian clinics should now be on alert.
“It doesn’t matter who you are, whether you applied for an amnesty or didn’t, they’re looking at you. Period,” he told TMR.
Now is the time for the clinics which run on a tenant-doctor or administrative entity set up, he said, to reach out for independent accounting or legal advice.
“Some of the really big areas that people will be exposed is their spreadsheets or these software calculator service fee programs; those can potentially self-incriminate people very quickly,” Mr Dahm said.
“It doesn’t matter how wonderful their logos are or if everybody’s using them, unfortunately, that’s not how payroll tax audits or income tax audits work. They frankly don’t care how popular they are and if everybody uses it. They’re more interested in whether it has a tax compliance view on it.
“They will be looking at … your business structure, your workflows, your accounting workflows, how your receptionist takes a phone call, or whether they book appointments in the name of the doctor and not in the name of the practice.”
Mr Dahm urged practices that had opted into the exemption program to double check any paperwork they had already lodged, particularly if they had relied on practice management software to work out how much bulk billing they had done.
One common error, he said, was GPs writing down the percentage of income coming from bulk billing as their bulk billing rate, rather than the percentage of services that were bulk billed.
The paperwork, he said, was complicated and “not terribly user friendly”, making it important to stay vigilant.
“If they start seeing these couple of errors, where they see it’s a few, that’ll open up the door to more,” Mr Dahm told TMR.
RevenueSA did not respond to request for comment before deadline.
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