Payroll tax audits and court cases during 2023 have brought the issue of payroll tax for medical practices into focus. Until recently, medical practices largely excluded contractors from calculations on the basis that the contractor operates their own business out of rooms rented from a medical practice.
Payroll tax is a state-administered tax with different rules, rates and thresholds in each state. Employers that pay employees or contractors totalling more than the state threshold must submit wage reports to the relevant state revenue office and pay the calculated payroll tax monthly.
A medical or health centre that pays contractors is deemed an employer for payroll tax; therefore, relevant payments made to the practitioner are treated the same as wages.
Many types of arrangements could be counted as relevant for payroll tax. Contractor agreements, service arrangements, and management or agency agreements could all be considered for payroll tax.
Various states have guidance on what contractors are included and excluded in payroll tax calculations. The recent focus is not because of changes to the law but because of audits and court cases where the final ruling required the practice to pay tax on contractor payments.
The rules in each state are similar but with some distinctions. It’s essential to check the contractor guidance for inclusions and exclusions in your state. In addition, each state currently has different dates at which they will enforce the tax on medical practice contractor payments, with some states offering an amnesty.
If your medical or allied health practice pays employees and contractors above the state threshold, you must do an internal audit on agreements with contractors. Check your state’s rulings on inclusions and exclusions and clarify written agreements with your contractors.
Payroll tax laws are notoriously complex and it’s a good idea to get professional advice about which workers should be included. Talk to us today about the contractor rules, and we’ll ensure you include the appropriate workers (and are paying only what you need to!)
If you need more clarification about the rules for contractors in your medical practice, please call 1300 696 585 or contact us now.
The ATO has shifted its focus from providing assistance with tax through the pandemic to now re-establishing the culture of businesses paying their tax debts on time.
Beginning from July 2023, The ATO has issued notices of intent to disclose business tax debts of more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days, to credit rating agencies (CRAs).
The ATO may report your business tax debt if it meets the following criteria:
The Commissioner has urged taxpayers, with outstanding debts, to engage with the ATO to not risk their business’s tax debts becoming visible in credit rating checks.
Section 255-15 of the Tax Administration Act 1953 empowers the Commissioner to enter an arrangement with an entity which has, or which is expected to have, a tax-related liability, whereby the entity may pay the liability by instalments.
Businesses need to pay their debt or enter an appropriate payment arrangement within 28 days of when the intent to disclose notice was issued to prevent disclosure.
In October 2023, more than 9,000 businesses are expected to have their debts disclosed and the ATO expects to issue 50,000 notices of intent to disclose by the end of 2023–24 financial year. A disclosed debt can impact your business’s ability to receive finance and your business may also lose suppliers.
If you have received a notice of intent or have a tax debt of $100,000 or more that is overdue by more than 90 days, we can assist you in engaging/re-engaging with the ATO and help create an arrangement or payment plan that best suits your current and future financial position. If you would like to discuss further or need any assistance, please call 1300 696 585 or contact us now.
If you’re running a business, most income you receive is assessable for income tax purposes. The total amount is referred to as ‘assessable income’. At Accorti we specialise in Tax for business owners.
Make sure to also check what income you can exclude – for example, some (but not all) COVID-19 government payments aren’t assessable if you meet the eligibility criteria.
At Accorti we are here to help you build a better future. We are experienced in assisting with all your tax needs to ensure you pay no more tax than required. If you would like to discuss further or need any assistance, please contact us now. We work with clients all over Australia and tax accountant teams in Brisbane and the Gold Coast.
If you take goods from your business for your private use, make sure you accurately record this in your stock on hand. At Accorti we are business tax specialists and are here to answer your questions.
Accessing your trading stock for private use is fine from a tax perspective, but you need to account for the stock correctly:
If you don’t adjust the actual cost of goods sold to reflect the goods you used for private consumption, you could be incorrectly claiming expenses you’re not entitled to.
A good plan is to set up regular reconciliation processes to help you keep track of each time you take stock for private use.
At the end of the financial year, any goods taken for your own use should not be accounted for as stock on hand.
At Accorti we are here to help you build a better future. We are experienced in assisting with all your tax needs to ensure you pay no more tax than required. If you would like to discuss further or need any assistance, please contact us now. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
Most of us need or want to have a car. Do you buy it under your business or as a personal expense? At Accorti we can help you work out if it’s better tax-wise to buy a car as a personal or business expense. If you buy it as a personal expense but use it for a business as well you can claim your business use – such as fuel, oil, servicing, and registration.
At Accorti we are here to help you build a better future. We are experienced in assisting with all your tax needs to ensure you pay no more tax than required. If you would like to discuss further or need any assistance please contact us now. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
You now need a director identification number (DIN) if you’re a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation.
A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with Australian Business Registry Services (ABRS).
Directors will only ever have one director ID. They’ll keep it forever even if they:
If you have a myGovID or apply for a myGovID (different from a myGov account) follow the link https://www.abrs.gov.au/director-identification-number and complete the steps to apply for your DIN.
As always feel free to reach out to our team with any questions or assistance you require. Contact us now
At Accorti Accountants +Advisors we are Business Accountants and are here to help you achieve your goals. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
Please find below a summary of various Qld & NSW COVID support measures announced as at 10 August 2021. The below list is not exhaustive. We encourage you to monitor State & Federal Government websites and media releases for changes and/or new measures. Contact us at Accorti Accountants + Advisors for more information
Outlined below is a summary of government support to help Queensland businesses during the COVID-19 lockdown announced on 31 July 2021.
Measure | Summary | Resources / Link |
COVID-19 Disaster Payment | As South East Queensland has been declared a Commonwealth hotspot, eligible Queensland workers who are impacted by the lockdown can apply for the Commonwealth Government’s COVID-19 Disaster payment of:
There is no liquid assets test to receive these payments. Applications can be made from the Services Australia website shortly. | |
2021 COVID-19 Business Support Grant | The Queensland Government has announced 2021 COVID-19 Business Support Grants of $5,000 for small and medium businesses affected by the COVID-19 lockdown in South East Queensland and lockdowns in other states.
Grants are also available for eligible large businesses in the hospitality and tourism sector operating in the 11 local government areas in the lockdown. Applications open in mid-August. The Business Queensland website will be updated shortly with further information on how to apply. | |
Other | For other potential COVID resources |
Measure | Summary | Resources / Link |
COVID-19 Disaster Payment | Under a new combined Commonwealth and NSW Government support package, the COVID-19 Disaster Payment will be further expanded and increased. From week four of a lockdown because of a Commonwealth Government declared hotspot, the Payment will increase to $750 pw (up from $600 pw) if a person has lost 20 or more hours of work a week or $450 pw (up from $375 pw) if a person has lost between 8 and less than 20 hours of work a week or a full day of work. The new national payment rate will commence in the week of 2 August and will be automatically updated for existing recipients. It will be available from day one of any lockdown in the future, with claims made from day eight in arrears, with a weekly payment then made for the duration of the Commonwealth hotspot declaration. No liquid assets test will apply. | Apply at Services Australia |
2021 COVID-19 Business Grant | A one off, tax free grant depending on decline in turnover experienced over a minimum 2-week period from 26 June 2021 to 17 July 2021, compared to 2019:
* Please note the revised timeframes for calculating decline in turnover for the 2021 Covid-19 business grant. For businesses (and not for profits) with:
Employee headcount retention condition applies. Applications open: 19 July 2021. Applications close: 13 September 2021 | |
2021 JobSaver Payment | Tax free fortnightly payments between $1,000 and $100,000 a week for the period from 18 July 2021 to eligible employers and sole traders (including not for profits) with aggregated annual turnover between $75,000 and $250 million (up from $50 million):
30% turnover decline test and employee headcount retention conditions apply. For sole traders, the business must be their primary income source Applications open: 26 July 2021 Applications close: 18 October 2021 | |
2021 COVID-19 Micro Business Grant | Tax free fortnightly payment of $1,500 to businesses (including not for profits) with annual turnover between $30,000 and $75,000.
Applications open: 26 July 2021 Applications close: 18 October 2021 | |
Hospitality and tourism COVID-19 support grant | Payment to tourism or hospitality businesses that have a turnover of more than $75,000 and an annual Australian wages bill of below $10 million, as at 1 July 2020. | |
Payroll tax relief | 2021/22 payroll tax waivers of 25% for businesses with Australian payrolls between $1.2M and $10M that have experienced a 30% decline in turnover, as well as payroll tax deferrals and interest free repayment plans. NSW businesses with a payroll tax liability have the option to defer lodgement and payment of their 2020/21 annual reconciliation until 7 October 2021. | NSW Treasurer’s media release 22 July 2021 |
Land tax relief
| Commercial, retail and residential landlords eligible for land tax relief equal to the rent reductions granted to financially distressed tenants up to 100% of their 2021 land tax liability. Available for rent reductions made from now until 31 December 2021. | NSW government support for residential and commercial tenants |
Residential landlord grant
| Residential landlords not subject to land tax can apply for either:
Eligibility:
| NSW government support for residential and commercial tenants |
Small business fees and charges rebate
| Sole traders, owners of a small businesses and not-for-profits may be eligible for a fees and charges rebate of $1500 to offset the costs of eligible NSW and local government charges due and paid from 1 March 2021. The rebate is available until 30 June 2022. | |
Assistance for not-for-profit and commercial performing arts organisations and music venues | A $75 million support package to continue paying staff and performers and provide support for loss of box office income due to COVID restrictions. Applications open: 23 July 2021 |
At Accorti Accountants + Advisors we specialise in helping clients through difficult times. If you have any questions Contact us now
Having control over how your retirement savings are invested is one of the many benefits of self-managed super funds (SMSF). On the flip side, the responsibilities and management skills required to run a SMSF are significant. This is because you’re accountable for your SMSF’s regulatory compliance—not your accountant, financial adviser, or solicitor. We consider what might make an SMSF more attractive than investing through a super fund, and some of the downsides to consider.
Having an SMSF provides more choice and freedom to access investment options that would otherwise be unavailable through a super fund. This includes assets like art and collectibles as well as physical precious metals and alternative assets like cryptocurrencies.
Unlike investing with an industry or retail super fund, your SMSF can borrow to invest in property or shares, typically using a structure called a Limited Recourse Borrowing Arrangement (LRBAs). This strategy may be an attractive option to help expand your investment portfolio. However, there are restrictions and compliance requirements. The Australian Taxation Office (ATO) has recently warned investors of the dangers of over-investing (and over borrowing) into property within SMSFs.
If you’re an SMSF trustee, you’re entitled to the same reduced tax rates that are available through industry or retail super. Your investment return is therefore currently taxed at a maximum of 15% rather than your marginal tax rate which could be as high as 45% outside of superannuation.
An SMSF fund can have up to six (6) members. Bringing six investors’ money together, offers greater scale to access investment opportunities that may not be available to you as an individual investor. Having scale may also help to keep fees down.
Managing an SMSF is not easy. As the trustee, you need to ensure the fund complies with all relevant regulations otherwise you could face severe consequences for getting it wrong. If the fund is deemed to have breached its compliance responsibilities, penalties can include fines and civil or criminal proceedings. Depending on the transgression, tax penalties could be levied, including fund returns being taxed the top personal marginal tax rate as opposed to the concessional super rate of 15%.
What investors often overlook is the financial and investment expertise required to run, or be involved in running, an SMSF.
As a trustee, you’ll be responsible for creating and implementing your own investment strategy—one that will need to deliver enough returns to adequately fund your retirement. The importance of this cannot be understated.
This means you need to:
You’ll also need to remain up to date on any changes to legislation that affect SMSFs as these may have compliance requirements. An understanding of how to manage legal documents, such as a trust deed, is also beneficial. However, a legal professional could help you with this.
The administration and management of an SMSF is time intensive so if time is something you’re short of, an SMSF may not be a good option. On the other hand, many SMSF investors enjoy the sense of involvement and purpose that running their own fund brings.
If you find you don’t have the time or investment knowledge to manage your SMSF, you can outsource this to investment managers, financial advisers, or other experts. This will come at an additional cost though and may defeat the purpose of “self-managing” your super (ie would you be better served with a managed super fund via an industry or retail fund?).
There is a lot of controversy around what should be a reasonable amount to set up an SMSF. Depending on the fund’s complexity and structure, set up costs, administration, reporting and legal fees can become expensive, so a general rule of thumb is to have around $500,000 as a minimum although there is no legal minimum.
Bottom line: SMSFs are not for everyone, they can offer significant benefits. Running an SMSF successfully requires investment, legal, super and admin skills—or the ability to get help from people who have those skills. A conversation with a financial adviser or accountant could help you decide whether going it on your own is a good option.
At Accorti Accountants & Advisors we specialise in helping clients with establishment and ongoing compliance for SMSFs. Contact us now. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
Starting up a small business? Then you will need to decide which type of business structure is going to be best suited to your needs. Here are the main benefits and disadvantages of the different business structures types.
There are four (4) standard structures to choose from:
We explain each, and the differences between them, below.
We can also help you decide which structure is right for you.
A sole trader business structure is the simplest. It is not expensive to set up a sole trader business as there are very few legal and tax formalities required to complete the set-up process.
If you choose to operate your business as a sole trader, you will be held responsible for all aspects of the business, this includes any debts incurred by the business and there are no set limits on the liability amounts.
Any net income or losses of the business is reported within your personal income tax return.
A business partnership structure is where two or more entities and/or people operate the business as partners or jointly receive income.
Management or control of the business is shared between the partners in this type of business structure.
A business partnership is not a separate legal entity, so all partners are liable for any debts and obligations from the business. It is highly recommended to have a formal partnership agreement, but it is not required.
Any net income or losses of the business is distributed to the partners in accordance with the partnership agreement and reported within the partners income tax return.
A trust is an obligation that is imposed on an entity or person (being the trustee) to hold assets or property (eg assets of the business) to benefit others (the beneficiaries).
A trust is a relatively complex business structure, with higher set-up and administrative costs. To set up a trust you will require a formal deed, and the completion of annual administrative tasks. If your business operates as a trust, then the trustee will be responsible for the operation. There may be tax advantages in using a trust structure for your business.
A trustee can be an individual or a company. There can also be more than one trustee.
Any net income of the business is distributed to the beneficiaries in accordance with the Trust Deed and reported within the beneficiary’s income tax return. Losses of a trust are trapped in the trust for future use by the trust.
A company is a legal entity separate from yourself. This basically means the company will have the same rights as any natural person and it can incur debt, sue and also be sued. The owners of the company (shareholders or members) can limit their own personal liability and they are generally not held liable for the company debts (unless personal guarantees were given to borrow money).
A company is a more complex business structure, and has higher administrative and set-up costs involved. All companies must be registered with A.S.I.C., and the company officeholders have legal obligations under the Corporations Act. Using a company structure for your business may have tax advantages.
Any net income of the business is reported in the company income tax return and taxed at the company tax rate. Losses of a company are trapped in the company for future use by the company.
Here is a snapshot of the key differences between each type of business structure:
| Sole Trader | Partnership | Company | Trust | |
| Complexity of business structure | Simple | Moderate | Complex | Highly complex |
| Cost | Low | Medium | Medium to high | High |
| Legal obligations | Low | Low to medium | High | Medium |
| Tax obligations | Low | Low | Medium | High |
| Separate legal entity | No | No | Yes | Yes |
| Liability | Unlimited | Unlimited | Limited | Limited (with a corporate trustee) |
There are a range of issues to consider with any business structure, including type of business, parties involved, risk of operations, the type of assets of the business and whether you expect to have employees. It is important to seek advice from an accountant and your legal advisors to ensure the appropriate structure for your business.
At Accorti Accountants & Advisors we specialise in helping clients with complex and challenging business structure issues. Contact us now
The government has now passed legislation for the extension of the Job Keeper Payment scheme from 28 Sep 2020 to 28 Mar 2021 (see our previous Blog here)
If circumstances or events outside usual business operations that resulted in the relevant comparison 2019 period (Sep or Dec 2019 qtr) not appropriate, then the Alternative Testing might apply.
To refresh, basic test is a decline in actual GST turn-over of 30 percent or more for the current test period qtr (the Sep 2020 qtr or the Dec 2020 qtr) compared to the relevant comparison period in the prior year (the Sep 2019 qtr or the Dec 2019 qtr). If you meet this test you will generally be eligible for the Job Keeper Extension.
If your entity fails the basic test, the Alternative test for turn-over is used to calculate if the entity has met the turn-over decline test for Sep 2020 or Dec 2020 qtr for eligibility purposes under Job Keeper extension program.
This test to be used if your business started operations after the 1st day of relevant comparison period, but not started on or after 1st Mar 2020.
Alternative Testing 1
If the entity started up business before 1st Feb 2020:
If the business began in Feb 2020:
Alternative Testing 2
Use this test only if your business began operations after first day of relevant comparison period but before the 1st Dec 2019.
Determine if the GST turn-over has decreased by a minimum of 30 percent, compare the applicable current GST turn-over for the Sep or Dec 2020 qtr with the current GST turn-overs for months of Dec 2019, Jan 2020 and Feb 2020.
This test used when:
Eg, the Sep 2020 qtr turn-over testing period, use this test if disposing of or acquiring part of the business from, 1st Jul 2019 but before the 1st Jul 2020. The disposal or acquisition also must have changed the current GST turn-over of the entity during that period of time. If disposal or acquisition made by the entity did not have an impact on the business in a way to change the current GST turn-over, then do not use this test.
Alternative Testing
Use the current GST turn-over from the month that falls immediately after the acquisition or disposal month and multiply by 3.
Determine if the GST turn-over has decreased by a minimum of 30 percent, compare the calculated figure with the applicable current GST turn-over for the Sep or Dec 2020 qtr.
Multiple disposals or acquisitions Alternative Testing
No whole month after disposal or acquisition Alternative Testing
This test used if:
Eg, when calculating actual decline in turn-over for the Sep 2020 qtr turn-over testing period, you can use this test if you had restructured the business, or a part of the business, from the 1st Jul 2019 and prior to 1st Jul 2020. This restructure also must change the entity’s current GST turn-over. If this restructure didn’t impact business in a way to change the current GST turn-over, then do not use this test.
Alternative Testing
Use the current GST turn-over from the month right after the month of restructure completion and multiply the current GST turn-over from the month by 3.
Determine if the GST turn-over has decreased by a minimum of 30 percent, compare the calculated figure with the applicable current GST turn-over for the Sep or Dec 2020 qtr.
Alternative Testing for multiple restructures
Not a whole month after the restructure Alternative Testing
This test to be used if the entity has had a substantial increase to its current GST turn-over of:
To test if your entity’s current GST turn-over increased, by at least the applicable percentage (50 percent, 25 percent or 12.5 percent), in the 12 (or 6 or 3) months immediately before the applicable turn-over test period or before 1 Mar 2020, compare:
| Table 1: Testing percentage increase in current GST turn-over | |||
| To test percentage increase in turn-over immediately before | 12 months
(50%) |
6 months
(25%) |
3 months
(12.5%) |
| Sep 2020 qtr (Jul to Sep 2020) | Test Jun 2019 turn-over with Jun 2020 turn-over | Test Dec 2019 turn-over with Jun 2020 turn-over | Test Mar 2020 turn-over with Jun 2020 turn-over |
| Dec 2020 qtr (Oct – Dec 2020) | Test Sep 2019 turn-over with Sep 2020 turn-over | Test Mar 2020 turn-over with Sep 2020 turn-over | Test Jun 2020 turn-over with Sep 2020 turn-over |
| 1 Mar 2020 | Test Feb 2019 turn-over with Feb 2020 turn-over | Test Aug 2019 turn-over with Feb 2020 turn-over | Test Nov 2019 turn-over with Feb 2020 turn-over |
Alternative Testing
To determine if your turn-over has declined by 30 percent, in applying this Alternative Testing:
This test used if:
Definition for this test, an area declared as a drought zone will include an area that is subject to formal declaration of drought by commonwealth, state, territory or local government agencies. Also included areas for which there is public identification and/or acknowledgment that area is drought affected by such agencies.
Eg, the public information sources following will provide acknowledgments, declarations, maps, statistics and guidance as to what declared drought zones are and drought affected areas for the purpose of this test:
Alternative Testing
Calculate the current GST turn-over of your entity for the Sep or Dec qtr in the year immediately prior to the year when the natural disaster or drought was declared, instead of the qtrs in 2019. Determine if the GST turn-over has decreased by a minimum of 15 percent, 30 percent or 50 percent, and compare the calculated figure against the current GST turn-over for the Sep or Dec 2020 qtr.
This test to be used if:
Your entity can’t use this Alternative test when the entity’s turn-over is cyclical. Eg, fruit grower business is seasonal & usually has less turn-over during particular months of the year can not use this test. Or, eg, business es that usually have increased turn-over in Dec because of Christmas trade can’t use this test.
Alternative Testing
Applying this Alternative Testing, you must use the entity’s average monthly current GST turn-over. To calculate your entity’s average monthly current GST turn-over, add the total of the current GST turn-overs for each entire month in the twelve months immediately prior to the applicable turn-over testing period or the 1st Mar 2020, and then divide the total by twelve. Then multiply your entity’s average monthly current GST turn-over by three and compare that to the current GST turn-over for the applicable turn-over test period.
This test used if:
Alternative Testing
Use the current GST turn-over from the month immediately prior to the month which the partner or sole trader did not work due to injury, sickness or leave and multiply by 3 then compare that figure with the current GST turn-over for the applicable turn-over testing period.
Bushfire or Drought Affected?
There are also various sub-tests for entities that fail an Alternative Testing (excluding Alternative Testing 5) where your entity has been affected by drought or bushfires.
At Accorti Accountants + Advisors we specialise in helping clients with complex and challenging issues. If you have questions or need assistance: Contact us now.
We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
#economicstimulus #covid19 #coronavirus #Job Keeper #Job KeeperScheme #tax #Job Keeper2.0
Sources: Australian Taxation Office and Australian Taxation Office
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Brisbane & Gold Coast Business Accountants.
Accorti Accountants + Advisors is a firm of chartered accountants that provide business accounting, tax, and advisory solutions for evolving businesses in Brisbane and the Gold Coast region.
