Medical practice back on track after being stung by payroll tax audit
A general medical practice needed us to review their contractual arrangements following a laborious payroll tax audit. Unfortunately, the NSW Office of State Revenue (OSR) had earlier determined that all doctors working on a service fee arrangement were employees for payroll tax purposes, including the owner of the business. The cost to the business of this audit was more than $100,000.
On reviewing the client’s business, WLM Financial found that numerous contracts with the doctors needed rectifying. The business structure had not been implemented correctly either, with unclear divisions between the owner and the service as entities. We tidied up the structures and contracts, and clarified several administrative procedures. After engaging a tax lawyer through our networks, we applied for and won a ruling from the OSR.
Our changes had other important effects on the business, too. The practice manager had been calculating payroll manually using spreadsheets – frustrating, and an unnecessary burden on her home life as a young mother. Getting the business payroll into the cloud saved her hours of time each week, while still maintaining the control of her books that she sought as a business owner.
Since updating the business structure for compliance we have gone on to review various other areas, including property investments, ensuring they meet all land tax obligations and maximise their property deductions.