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Tax authorities to target eyecare sector

15/08/2018By Matthew Woodley
Tax authorities are likely to scrutinise the healthcare sector, including ophthalmic clinics, more closely in the coming months, according to a note to clients from an Australian business law firm.

The note cited a case in which the Victorian State Revenue Office had recently raised amended assessments for a large optometry practice, and warned state revenue departments would be targeting businesses operating in the healthcare industry to ensure compliance with payroll tax obligations., a website specialising in producing content for small and medium business owners, reported the Melbourne firm, Hall & Wilcox, had stated that the manner in which clinics have structured arrangements regarding the medical professionals it employs would be a particular focus.

“In many cases, medical practitioners are engaged by a service entity (or medical centre operator) as contractors to work in these clinics. The Revenue Offices have sought to apply payroll tax to the payments made by the centre or clinic to the medical practitioners,” the note stated.

The firm used the example of a recent decision against an optometry clinic owner in the Victorian Civil and Administrative Tribunal to reinforce its message.

“In Optical Superstore, the applicant was the owner and operator of an optical clinic. The Victorian State Revenue Office raised amended assessments for payroll tax in respect of payments made by the applicant to optometrists who provided services to the general public at the applicant’s facilities,” it said.

“The features of the arrangements in the Optical Superstore case will be familiar to medical and healthcare providers, in that the applicant:

• owned and managed an optical store

• collected income from optical sales and the provision of eye tests to customers

• paid a portion of the income from its customers to the optometrists.”

The note added that business operators should revisit the legal agreement they have with relevant medical professionals as well as how patient payments are divided to ensure compliance.

“Consult a legal adviser to confirm your payroll tax obligations (if any) on the payments you make to the medical professional,” it warned.

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