Payroll Tax Update for Dentists

Good news recently in SA with the announcement of an assurance from the Premier that dentists will not be assessed retrospectively for payroll tax.

The other states are now urging their governments to follow suit. If they refuse, interstate dentists potentially face tens of millions of payroll tax bills, starting from 2013.

When new legislation is introduced, generally it becomes active on the date it is announced publicly, therefore avoiding the possibility of businesses/individuals being caught out when they have followed the old law, which has now changed. However, in this case, there has been no change in law. There has been a change in interpretation, after a case in NSW (Thomas and Naaz v Chief Commissioner of State Revenue) went to Court. This change in interpretation made previously accepted independent contractors to be employees under State payroll tax legislation. And whilst there is separate legislation in each state and territory, the areas all have very similar legislation, meaning that a case in NSW is still picked up in SA.

Last year, an amnesty was put in place for general practitioners to give them protection against retrospective payroll tax assessments until 1 July 2024. But dentists, medical specialists (not GP’s) and allied health professionals were left out. Now that dentists have successfully negotiated retrospective protection, there is an expectation that the government will have to follow suit with the rest of the medical profession.

The general opinion in the Health space is that this tax will be passed along to patients to foot the bill, begging the question of why this tax would be introduced amid record ramping and cost of living pressures. The AMA and RACGP are quoting a rise for each standard patient appointment of between $12 and $18 to see a GP. We are likely to see increases, but in varying amounts, for all health appointments - dental, GP, specialist and allied, once the amnesty ends 1 July 2024 - unless the interpretation currently verbalised by Revenue SA is relaxed or challenged in Court.

Lisa Hickey, Hood Sweeney Director and Health Team Leader has been working with the the ADASA and is a leading expert in this field. Contact Lisa on lisa.hickey@hoodsweeney.com.au to book a payroll tax assessment for your practice to make sure you have the latest information and interpretation, in order for your firm to be ready for the 1 July deadline. ADASA members receive a 10% discount on the payroll tax assessment.