To print this article, all you need is to be registered or login on Mondaq.com.
If you have read any of our other articles about payroll tax,
then you will know that one of the most important aspects of
protecting your medical practice against an unnecessary payroll tax
exposure is ensuring that the relationship between the doctor and
the practice is as clear as possible. One of the main ways to do
this is to ensure that the language used when discussing that
relationship is accurate and appropriate.
We have outlined below some of the fundamental areas where
practices are unnecessarily exacerbating this confusion and
creating payroll tax exposure on their websites and social media.
While we have included some examples of where this language can be
improved, this article is not intended to be exhaustive and we
strongly recommend that you get in touch to arrange a consultation
to discuss your specific practice circumstances.
Each of these examples are based on the practice structure we
encounter most commonly, whereby a doctor engages a practice to
provide various services to that doctor (e.g., administration,
billing, reception, appointment booking).
Team language
Practices commonly create payroll tax exposures by inadvertently
misrepresenting the relationship between the practice and the
doctor, particularly by using overly collegiate marketing
language.
For example, while it may be helpful from a marketing
perspective to highlight the caring nature of the services the
doctor provides and in assuring the doctor’s patients that they
are in good hands, using collegiate language which implies that the
doctor and the practice are a “team” or that they
“work together” creates legal risk. The reality is that
this is not the case, rather, the doctors and the practice are each
operating separate and very distinct businesses. This can then
create a payroll tax liability risk because the nature of that
relationship is being publicly misstated.
Implication regarding provision of services and the
relationship with patients
Another example of this collegiate marketing language that we
encounter frequently is language that incorrectly implies that the
practice is providing medical services to patients. While this,
too, helps a website feel more approachable and friendly for
readers, this could lead to confusion and an increased payroll tax
liability risk. Practices should be careful to ensure that their
marketing material makes clear that the patient does not have a
relationship with the practice. Rather, all services the patient
receives are provided by their doctor, with the practice simply
providing administrative support services to the doctor.
Recruitment
Like any business, a medical centre often needs to advertise
their offering to potential clients and customers. We have
observed, though, that often these advertisements are framed as
“recruitment” and use recruiting language.
Like with team language, recruitment language has the appeal of
making the advertisement more readable and friendly. Unfortunately,
this can also imply an employment relationship which would increase
the likelihood of the relationship between the doctor and the
practice being characterised to be subject to payroll tax.
Instead, these advertisements should be framed as an offer of
facilities and services that are available to your key target
market (whether that be allied health, general practitioners,
medical specialists or a combination).
“Contractor doctors”
Many practices will (both informal written communication as well
as general discussions) frequently refer to independent doctors as
“contractor doctors”.
An “independent contractor agreement” is used by a
business to engage someone to provide services to the business.
When this document is used, the person providing the services is a
“contractor”. Given the nature of an independent
contractor agreement, they will often satisfy the criteria for a
relevant contract and be subject to payroll tax.
This is a different model to what most medical practices will be
operating under, namely where the practice is being engaged by the
doctor to provide services to that doctor.
The difficulty we have observed is that many practices are
referring to doctors who engage their services as
“contractor” doctors to try and emphasise the
doctor’s independence. However, this could actually have the
opposite effect of increasing the risk that the relationship
between the doctor and practice is misinterpreted and a payroll tax
liability being imposed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Tax from Australia
#words #matter #language #payroll #tax #medical #practices #Corporate #Tax
