Key Learnings: ✅ Structuring tax-deductible overseas conference travel ✅ What is and what is not considered work-related travel ✅ Food, entertainment & incidentals to claim while travelling ✅ Smart systems to track employee travel expenses

Many people ask us what is different about a specialised health accountant. I really think that the answer to this lies in the conversations and the extra value a health-specific accountant can provide to your business. Watch below for five conversations I recommend all business owners have with their accountants in 2023. If you are not getting the support you need please reach out to our team.

On May 9, 2023, Treasurer Jim Chalmers presented the Australian 2023/24 Federal Budget. The budget took a cautious approach, focusing on cost of living pressures, health funding, and strengthening tax compliance. Below are four updates relevant to our GrowthMD clients: 1. Small Wins for Small Business While the wins for small businesses in this year's budget are less impactful than in previous years, there are still some positive changes: Small businesses with a turnover of less than $10 million can now instantly write off assets of up to $20,000 if the assets are used or installed for use between July 1, 2023, and June 30, 2024. Small businesses can claim an additional 20% deduction up to a cap of $20,000 for depreciable assets that support energy efficiency and electrification if the assets are used or installed for use between July 1, 2023, and June 30, 2024. Examples of these assets are energy-efficient fridges and electric heating or cooling systems. This is available to businesses with a turnover of up to $50 million. Small businesses with a turnover of less than $10 million can participate in the lodgement penalty amnesty program, which applies to unmet tax obligations due between December 1, 2019, and February 28, 2022. Lodgement of these returns between June 1, 2023, and December 31, 2023, will not trigger late lodgement penalties. 2. Increased Future ATO Compliance Activity Revenue estimates from ATO tax compliance activity are among the largest revenue-raising items in this budget. Taxpayers should ensure their affairs are up to date and correctly managed in the event of future compliance activities. The activity funded in this budget includes: Expanded anti-avoidance provisions to apply to the taxation of foreign residents paying low rates of tax in Australia. A focus on GST compliance with funding for the ATO to develop more sophisticated analytical tools to identify risk. Expanded scope of the personal income tax compliance program, particularly focused on emerging risk areas of deductions around short-term rental properties such as Airbnb. ATO funding to deal with taxpayers with large tax debts or aged debt of more than 2 years. 3. Medicare Funding Increases Given recent awareness campaigns on the state of General Practice and Health in Australia, this area received significant funding in the 2024 budget. Of particular interest to our GrowthMD client groups will be: Introduction of the MyMedicare patient registration system, including a $2,000 upfront payment for registering a patient identified as a regular hospital ED user. Increases to the Workforce Incentive Payment, making the maximum payment $130,000 per practice. Increases to Medicare Rebates from November 2023. Creation of a Level E MBS item for consults over 60 minutes ($184 rebate). Tripling of the bulk billing incentive for select patient groups on select item numbers. Increased funding of telehealth for registered MyMedicare patients. Changes to the bulk billing incentive and patient registration funding should be carefully considered before changing your current billing and appointment policies. GrowthMD can discuss the financial impacts and analysis for your practice with you once full details become available. 4. Other Need-to-Knows From July 1, 2026, employers will be required to pay superannuation on payday, rather than quarterly. While there is a 3-year timeline to ready our clients for this change, it should be kept on the radar and factored into future business and cash model planning. Pay As You Go (PAYG) instalments will be increased by only 6% for the 2023/24 year, down from the 12% originally set in reference to GDP adjustment. This delivers a cash flow reprieve for business and investment-earning individuals or entities paying quarterly PAYG instalments. The Build-To-Rent Scheme will be available for construction projects of over 50 apartments and will provide increased capital works write-off deductions and decreased withholding tax rates. This scheme will primarily benefit developers and has significant restrictions involving a 10-year ownership term and 3-year minimum lease term. Do you have further questions on how the budget will impact you and your business? Please contact your GrowthMD accountant or call us on 07 3292 1158.

The Australian Tax Office has made a change regarding tax deductions for working from home. There are now two methods available for claiming a tax deduction for expenses incurred while working from home. Method 1 The first method is called the "actual method." This involves keeping all invoices and receipts related to running your home and calculating your deduction as a portion of your expenses. To use this method, you must have a part of your house set aside exclusively for work (staff working from your home, seeing clients at your home etc). This method will not be applicable to the majority of GrowthMD health clients. Method 2 The second method is the new "67 cents per hour method." This method allows you to claim a tax deduction by multiplying the number of hours worked at home by 67 cents. You can use this method to claim expenses such as energy, internet, phone, stationery, and computer consumables. Unlike the actual method, you don't need to have a specific part of your house set aside for work to use this method, and more than one person in your house can use it. Record-Keeping Requirements – Method 2 To use the new 67 cents per hour method, you must keep actual records of the hours you work at home from 1 March 2023. Looking ahead to the 2023 income tax return claim, this means keeping a daily record of the hours worked from 1 March 2023 to 30 June 2023. We suggest keeping a diary note (or a worksheet record) of the number of hours you worked each day. Additionally, you must keep at least one monthly or quarterly bill to show that you incur expenses (such as internet and electricity bills). If you have any questions about claiming a tax deduction for working from home, please reach out to your GrowthMD accountant. We are here to help you keep the required documents for this change and ensure that you receive the maximum tax deduction available.

QLD Payroll Tax Amnesty In early February, the QLD Government announced an intended “payroll tax amnesty” for medical centres making payments to General Practitioners. While the amnesty was initially seen as a welcome relief in the aftermath of PTAQ000.6.1 (Relevant contracts – medical centres), the subsequently released detail around eligibility for the amnesty may not be as pleasing. We recommend practices obtain individual legal and accounting advice before registering an expression of interest for the amnesty. Eligibility The Queensland Revenue Office website (updated 10 February 2023) and its expression of interest form state that medical practices that successfully apply for the amnesty will not be required to pay payroll tax on payments made to contracted GPs up to 30 June 2025, and for the previous 5 years. Other eligibility requirements include: The amnesty is limited to contractor payments made to GPs. For the purposes of the amnesty, a GP is registered as a general practitioner with the Medical Board of Australia. The amnesty may be available to medical practices that have: - Not been paying payroll tax on payments to contracted GPs - been, or currently are, subject to compliance activity in relation to payments to contracted GPs. The amnesty is not available to: - other medical doctors or allied health professionals - medical practices that are already complying with their payroll tax obligations - new medical practices Evolving Terms We reached out to the Queensland Revenue Office for clarification on some of the amnesty eligibility wording and received communication on 16th February 2023 noting that Government is still deciding the final terms of the amnesty. We advise our clients not to complete an expression of interest or registration application until the terms of the amnesty are finalised and understood. Proceed With Caution We are concerned about the current wording of the amnesty and whether agreeing to the amnesty terms is akin to nominating that the medical centre is indeed making taxable payments to contractor GPs, which will in the future be liable for payroll tax. We note that many medical centre entities are structured and operated in a manner where no payments are made from the medical centre to GPs for services. These entities seemingly do not fit the amnesty eligibility criteria and should be cautious in agreeing to criteria that do not reflect their actual conduct and operations. While it is understandable that many medical centres want relief from the threat of a large payroll tax liability, registering for the amnesty (based on the current detail) may run the risk of the practice unknowingly self-nominating themselves for future payroll tax liabilities once the amnesty period ends. We certainly hope this is not the case and the final terms resolve this concern, however, we suggest a cautious approach to registration in the interim. Further Advice We will continue to keep you updated on the evolving terms of the amnesty. For specific concerns please contact kelly@growth-md.com. We also encourage you to obtain further legal and individual accounting advice in relation to your practice arrangements, structure and payroll tax liability risk.

The QLD Office of State Revenue released PTAQ000.6.1 – Relevant Contracts – Medical Centres on 22nd December 2022. In a Nutshell (Our Interpretation) If applied, the OSR's position in this ruling will see more QLD medical centre entities assessed for payroll tax in relation to independent practitioners providing services from their centres The ruling does not contain new or altered application of the payroll tax legislation The ruling is the QLD OSR's interpretation of legislation and recent case law However, it does delve deeper and provides specific guidance on service entity and tenancy-type arrangements. The examples provide a narrower and stricter interpretation than previously published Office of State Revenue guidance The ruling implies a “typical” service arrangement, and many tenancy arrangements are viewed as relevant contracts by the OSR and therefore payments will be considered taxable wages and subject to payroll tax Examples are provided that are reflective of many current medical centre arrangements Trust account arrangements are likely to be ineffective in isolation Changing banking arrangements so that the medical centre does not collect fees is not in itself a solution to avoiding payroll tax liability Medical centres should re-consider if their arrangements with independent practitioners are likely to be classed as relevant contracts Relevant Contract - Medical Centre Setting Payroll tax liability is not restricted to situations where an employee-employer relationship exists. When amounts are paid to contractors under a “relevant contract” they are considered to be taxable wages unless a specific exemption applies. This ruling defines a relevant contract between an entity that conducts a medical centre and a practitioner when: the practitioner carries on a business or practice of providing medical-related services to patients in the course of conducting its business, the medical centre provides members of the public with access to medical-related services engages a practitioner to supply services to the medical centre by serving patients on its behalf an exemption does not apply. The relevant contract provisions were introduced in 2008 to capture payroll tax revenues lost when an entity engaged contractors rather than traditional employees. The relevant contract provisions in NSW, Victoria and QLD are substantially aligned. Ruling Key Points OSR Interpretation The detail in the ruling, in addition to the numerous examples shared, puts all medical centre operators on notice. Previous ambiguous or varied interpretations are effectively squashed by this ruling meaning that there is less confusion over where the line in the sand sits when it comes to audit activity and the OSR's position. It should be noted that this ruling is the OSR interpretation of legislation and recent case decisions only. However, in the absence of a test case that examines the legal basis for this interpretation, it appears that a medical centre providing services to independent practitioners under an agreement will likely be assessed for payroll tax in relation to the practitioner's services or payments. The onus will be on the medical centre to object to this payroll tax assessment. QLD Audit Activity As a result of consultation between the QLD OSR and various interest groups including AMA Queensland, written confirmation has been provided confirming audit activity in General Practice will be limited to the 2022 financial year and onwards. While this is welcome and provides some comfort around the size of potential audit liabilities, it still leaves a large portion of the health practice community exposed and vulnerable to audit liability and penalties moving forward. Exemption Eligibility There are limited exemptions, which are available on application to the commissioner. In our experience, the majority of medical centres and independent practitioner arrangements do not meet the exemption criteria. The exemptions are: 1. The practitioner provides services to the public generally 2. The practitioner performs work for no more than 90 days in the financial year 3. Services are performed by two or more persons Recommended Action All health practices should re-engage with legal and accounting experts knowledgeable in payroll tax application to health and medical centres. GrowthMD is working with other leading medical accounting and legal advisers in QLD to provide clear communication to health practice owners over the coming weeks and months. While we have always operated a payroll tax risk minimisation strategy for our clients, looking ahead we intend to work through various business model changes and reporting options available. Further communications will be circulated to our clients shortly. This information is general in nature. We encourage all readers to obtain specific legal and accounting advice. This information is based on our interpretation of the content examined and may change as further information becomes available.

The income of GP and health service businesses decreases by approximately 35% in January compared to the monthly average! This quick video talks about seasonality and three suggestions for planning and making use of your quiet months.

Labor released the 2022/23 Federal Budget on 25th October 2022. We have prepared an informal 5-minute recap on the budget's tax, finance and health announcements.

Key Information: ✅Extra 20% deduction for employee training and skills improvement ✅Small business technology investment boost ✅ATO's tough new stance on lodgements and debt collection ✅New rules on allocating profits to medical practice owners

Single Touch Payroll (STP) has been in place for some time now and you (the employer) will be aware of the requirement to file pay run information with the ATO each time you process payroll. You may have also heard of STP Phase 2, where additional information is now collected and filed to the ATO with each pay run (you can read about STP Phase 2 on the ATO website here). Although the official start date for STP Phase 2 reporting was 1 January 2022, some accounting software (Xero included), have a deferral in place, meaning their users are not required to comply with STP Phase 2 until 31 March 2023. Setting up for STP Phase 2 in Xero Recently Xero has begun rolling out STP Phase 2 (beta), this means some users can see the STP Phase 2 settings and begin preparing their Xero Payroll file for STP Phase 2. Once released to you, Step 1 is available in the STP Phase 2 Portal of your Xero file. Here you will update your employee profiles to select employment type: Employee or Contractor. For employees, you will also select income type: Salary and wages, Closely held payees or Working holiday maker. What Options Should I Select? We have had questions from our clients regarding the employment type and income type options. Please review the information below before making your selection. Employee or Contractor - For our medical industry clients, most payees will be engaged as employees. The contractor employment type should be selected when payees have their own ABN and have entered into an agreement to provide services to you via a contract relationship. You may have these individuals set up in your payroll system in order to meet superannuation or PAYG withholding obligations. Note: Practitioners paying service fees to your entity and running their own business are not required to be set up in payroll or reported via STP2. Closely Held Payees – This is a payee who is directly related to a small employer entity (19 or fewer employees) from which they receive payments. This can include family members of a family business, directors or shareholders of a company, and beneficiaries of a trust. Working Holiday Maker – Foreign residents working in Australia, who have a visa subclass of either ‘417 Working Holiday’, or ‘462 Work and Holiday (backpackers)’. Salary and Wages – The most common income type, encompassing everyone except the previously mentioned two categories. We will be in touch again in early 2023 as Xero finalises the STP Phase 2 settings and rolls these out to all users. For most Xero users, setting up STP Phase 2 will be straightforward (STP Phase 2 changes in Xero). If you require any assistance preparing your Xero Payroll file for STP Phase 2, please engage your GrowthMD adviser.