Relief for Victorian GPs as Victorian Government announces payroll tax exemptions for employee and contractor GPs
In a major backdown following extensive lobbying by the Royal College of General Practitioners and other health bodies, the Victorian State Government have completed a U-Turn on their earlier position on payroll tax applicable to contractor and employee General Practitioners.
The welcome news to the medical profession will ensure ongoing support for the industry, securing the sustainability of medical practices into the future as well as the ability to continue to deliver critical healthcare to Victorians.
Earlier guidance from the State Revenue Office made moves for medical centres to treat service agreements with doctors as a relevant contract for payroll tax purposes, and the payments made from the medical centre to the practitioner for their work would be liable for payroll tax. This treatment jeopardised the ability for medical centres and their practitioners to provide an appropriate level of care to their patients.
Key take-aways from the GP payroll tax announcement on the 22nd May include:
1. Retrospective exemptions
The Allan Government announced that all Victorian general practice businesses will receive an exemption from any outstanding or future payroll tax assessment issued for payroll tax on payments to contractor GPs for the period up to 30 June 2024.
2. 12 month extension
For general practices who have not yet received advice or started to make payroll tax payments on this basis will receive a further 12 month exemption from payroll tax payments to contractor GPs through to 30 June 2025.
3. Future exemptions to bulk-billed consultations
From 1 July 2025, the Allan government will provide an exemption from payroll tax for payments to contractor and employee GPs for providing bulk-billed consultations, to help GPs provide more bulk-billed consultations and ensure the future of affordable healthcare for Victorians.
It is also important to note that the announced relief is only for medical GP's and is not applicable to other healthcare practitioners such as dentists, occupational therapists and optometrists.
Quotes attributable to Royal Australian College of General Practitioners Victoria Chair Dr Anita Munoz:
“The prospect of retrospective tax bills on GPs was a source of enormous stress for many general practice teams and their communities. We are grateful the Victorian Government has taken retrospective taxation off the table. This move will help keep local GPs’ doors open.
“We appreciate the Victorian Government coming to the table and working with us to find a middle-ground solution.”
“GP practices now have the certainty we’ve been asking for and can plan for the future.”
Further information on the announcement can be found via the State Government media release.
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