Last update 2.1.2023: 

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This article was first published by the Medical Republic on 28th November 2022.

These are some of the latest relevant updates to this article.

Need a DIY website? The why and how of getting a tax-friendly doctor website click HERE. 

Need legal proof? With your lawyer or accountant share this regulatory history of independent contractor law affecting medical and healthcare practices click HERE. 

Need a useful checklist? The article “What do brothels and medical and healthcare practices have in common: ATO contractor rules!” click HERE.  

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If you are an independent contractor and want to build your own website, due to the Australian Tax Office Ruling detailed below, we hope this article will help you: 

If you do not have an independent medical and health contractor website, you risk losing your tax breaks e.g. genuine income splitting to spouses, rent, mortgage interest, rates and land tax and other deductions.

I’ve already had a pushback from a senior GP who says they don’t want to do it because they don’t want to advertise for more work and don’t use social media. We understand, but this has now become a significant tax issue that both the provider and the practice must address.

Significant tax risk

The practice may also be at risk as well as the contractor as it may trigger a payroll or income tax audit.

The ATO has ruled that contractors must set up their own websites, and the High Court has confirmed that this is the case

This means that you should set up now your own website and promote your services to patients and potential clients. You can also use your website to sell products and services, and to promote your business to other businesses. If you have your own website you can use it to generate income, and to promote your practice to a wider audience.

If you are a medical or health contractor, you need to have a website in order to claim many of the tax deductions and other benefits that are available to you.

A website is an essential tool for any medical or health contractor, as it allows you to keep your patients and clients up to date with your latest news and developments. Having a website also allows you to claim many of the tax deductions and other benefits that are available to you. The Australian Taxation Office (ATO) has recently issued a ruling confirming that medical and health contractors who do not have a website are not eligible for many of the tax deductions and other benefits that are available to them. This ruling applies to all medical and health contractors, including those who work as general practitioners, specialists, surgeons, GPs, physiotherapists, chiropractors, and any other type of medical or health contractor. 

If you are a medical or health contractor, you need to set up a website now in order to claim the tax deductions and other benefits that you are entitled to. The ATO ruling applies to all medical and health contractors who do not have a website, regardless of whether they are self-employed or working for a company. If you are a medical or health contractor, you need to set up a website now in order to claim the tax deductions and other benefits that you are entitled to. 

Need more details, read on

What makes Income tax: personal services income and personal services businesses Taxation Ruling 2022/3 special it comes after a contractor taxpayer lost his High court appeal which examined who must make the offer. This ruling immediately comes into effect.

Technically, if you are a contractor, and you do not have a website, this ruling can be used against you to deny or limit important tax deductions. We can only speculate it being classified as a personal service income 

“Who must make the ‘offer’

106. The offer must be made by the sole trader or PSE.

107. Where an offer is made by an individual and it is clear that the offer is made by the individual as a representative of the PSE, then the offer is considered to have been made by the PSE and this element of the test will be met.[81]

108. Where an offer is made to a sole trader or PSE by the service acquirer, this element is not satisfied because it is the potential client (service acquirer) making the offer rather than the sole trader or PSE.”

 

Contractor and practice arrangements are at risk

Failure to do so may put at risk your practice and your contractor arrangements.

For specific examples from earlier articles, webinars, and seminars, click here.

 

The contractor must, on their own account and not just the practice, make a “public offer” for their own services.

Every tenant doctor or contract doctor needs their own separate website with their own separate domain name away from the practice (this may include a separate email address). There is no harm if it is linked to and from each taxpayer’s website.

Failure to do so may limit your tax deductions because you will not be viewed as a “genuine business”

Should the ATO and Payroll Tax Office come knocking on your door, your service agreements and service fee accounting and reporting systems must walk the talk. Technology exists that can make this happen.

The ATO’s new data sharing and matching laws and tools will instantly pick up any reporting differences, e.g., income banked using the incorrect ABN. From 1st July 2022, Services Australia (formerly Medicare) is e-invoicing compliant and can track and report all earnings in real time.

 

 

We are concerned this tax enabling legislation means the regulators can easily scrape data off the web about a contractor’s trading name, Australian Business Number (ABN), and the providers’ and practices’ websites. 

Various State Revenue authorities are already using a similar data surveillance technique that we have reported in live investigations in the article below

Worse, does this make it easier for non-compliant practices to be seen as employees for the purposes of Fair Work, ATO PAYG, Superannuation, Payroll Tax, and Workcover? 

 


This in-depth article using actual examples from tax audits, “Payroll tax is harming your patients and the future value of your medical and healthcare practice,” can assist you in determining what immediate steps you must take to address any tax compliance concerns.

For more insights visit our blog.

About me: David Dahm BA (Acc.), CA., FCPA, CTA, FFin, CPM, FAAPM, FAIM, FGLF.

Chartered Accountant, Chartered Tax Adviser, Registered Tax Agent, Former AGPAL Surveyor 10 years of service

David Dahm is CEO and founder of the national medical and healthcare chartered accounting firm Health and Life and global Founder and CEO of the not for profit project the International Healthcare Standards and Ethics Board (www.ihseb.org)

After a serious work related car accident in 1989, and nine operations later I continue to be a patient and provider advocate. I enter my third decade as a national Chartered Accountant for Medical and Healthcare practices in Australia. I am a former 10-year Australian General Practice Accreditation surveyor. I come from a medico family. I have served on the AAPM national Board and was the inaugural national Chair of the Certified Practice Manager CPM post nominal. I continue to provide accounting tax and practice management advice to many practices all over Australia.

You know who you are and I thank you for this real honour and privilege to serve you and your community through you. Note, I am not a lawyer please seek appropriate legal and accounting advice. This information is for general information and discussion only.

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