Happy New Year everyone, unfortunately my grim 2023 prediction is for, an unprecedented level, of statutory independent contractor tax and fair work audits.
Why now? Well the main reason is the government has new weapons-grade surveillance tools. If not enough of a reason, these tools are backed up by recent High Court interpretations/ATO rules and new tax office data sharing and matching technology.
Need proof check this table of “The regulatory history of independent contractor law affecting medical and healthcare practices”. The Queensland State Revenue Medical and Healthcare Payroll Tax Ruling at the bottom of the table totally vindicates our position.
The good news is there are solutions.
Do not be like GP Professor Max Kamien who found out from his patient a Supreme Court judge who told him in his article…
“It is everyone’s responsibility to know, or to find about, the laws pertaining to them.”
He was unsympathetic: “Ignorance of the law is never an excuse”
It is time to stop pleading ignorance or blaming others
If you have underinvested over the years in your accounting, legal systems and documentation, it is time to do something. Doing nothing is no longer an option.
It may not be easy or cheap. DIY or piece meal approaches to this matter are no longer viable options.
For the die hard skeptics who need more urgent convincing this indendependent contractor legal history table will help you work out how much work and what resources you will need.
In recent years, governments have been introducing and implementing surveillance tools that can access data about citizens on a much larger scale than ever before. This means that anyone’s privacy is at risk of being compromised. But what does this mean for individuals, and why should we be concerned? Let’s explore these questions in more detail.
The High Court Interpretations/ATO Rules
The Australian High Court has recently interpreted the ATO rules to mean that the government can access data from certain organisations, such as banks and financial institutions. This means they can gain access to information such as your bank account details, credit card transactions, loan repayments, and so on. This data could potentially be used by the government to determine your tax liability or carry out other types of investigations against you.
Data Sharing Technology
In addition to the High Court interpretations/ATO rules, the tax office now has access to new data sharing technology which allows them to share certain kinds of information with other government departments in order to speed up processing times. This means that even if you don’t think you are doing anything wrong, it is still possible for the government to have access to your private information without your consent or knowledge.
New Weapons-Grade Surveillance Tools
The most concerning aspect of all this is the new weapons-grade surveillance tools that governments have been using in recent years. These tools allow governments unprecedented access into people’s lives and activities, even if individuals are not under any suspicion of wrongdoing. These tools also allow governments to bypass traditional laws and regulations when accessing people’s personal information – something that has raised serious concerns among privacy advocates and civil liberties groups alike.
I am acutely aware that some may like to suggest that this is simply my presentation of the matter. Please note, I not just welcome but appreciate feedback, as it is important that advisers and doctors and healthcare providers are receiving the best available information. I have always seen a significant aspect of my career, as being the canary in the coal mine. To enable doctors the best chance of avoiding serious legal and accounting issues.
Evidenced Based Fact, not opinions
The 20 key judicial and regulatory rulings since 1978 are detailed in the regulatory history table click HERE. Recent feedback prompted me to put this table together to fully empower anyone still sitting on the fence.
Medical Tax Exemption Immunity: fanciful thinking?!
More taxation is the elephant in the room for all cash starved Governments worldwide. With the High Courts blessing would you expect any Government to say no to collecting more taxes, especially at this time?
Many are hoping the AMA/RACGP or doctors will be able to argue some special tax law exemptions. This makes for poor political optics; you should expect continued negative media if lobbying by Doctors’ groups do not cease. If people feel you are trying to morally hold the “less privileged” community to ransom, nothing will be gained other than further erosion of public confidence in the health profession.
Death and taxes unfortunately are inevitable; surely to work with them and not against them, bodes for the most optimal outcome.
It take decades for any change to occur. This table of “The regulatory history of independent contractor law affecting medical and healthcare practices” is evidence.
How do you protect yourself from poor legal and accounting advice?
It has been reported by practices that their legal and or accounting advisers state the laws are new or evolving or all these new laws are simply scare mongering.
The legal history table makes it clear it is naive to think otherwise. The national taxation board (equivalent to AHPRA) has been given in 2022 $30m to investigate high risk advisers who provide poor advice. Our greatest concern is the likelihood of pattern recognition, that being if one of their clients fails an audit it may trigger further investigation of all their former and existing clients.
You should seek better experienced and qualified advice by emailing your advisers the table. Ask them to put any and all advice in writing in relation to their knowledge on the matter.
This may be crucial if you ever have to file a tax or contractor audit defence.
Sadly, I predict in coming years, more practices will look to hold their advisers accountable for negligence. Why do I say that? Well because we currently have 3 separate matters where we have been asked to assist clients who each consider they have been profoundly misled by their legal and accounting advisers, across three different jurisdictions.
Furthermore, some practices out of financial desperation (as they fight off insolvency) will have no other option, but to sue their favoured family accountant or lawyer for damages.
It is clear that governments now have more power than ever before when it comes to accessing citizen’s personal data without their consent or knowledge.
The combination of High Court interpretations/ATO rules, data sharing technology, and new weapons-grade surveillance tools puts our privacy at risk like never before – which is why it is important for us all to be aware of these issues and take steps to protect ourselves against potential invasions of our privacy by our own governments.
Most importantly you do not want to accidentally self -incriminate yourself or others.
Everyone deserves the right to protect their own personal information – no matter who they are or where they live. And it starts with being informed about these matters!
The bottom line is to educate yourself and start implementing now, time is your real enemy. Read the bottom of this independent contractors regulatory table click HERE on what to do next.
“Being an honest fool is not a defence, unless you have been profoundly misled by your adviser”
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.