Question 1

What deductions can doctors claim?

Accepted Answer

Doctors can claim work-related expenses directly related to earning their income — common items include professional indemnity insurance, AHPRA and college registration fees, medical journals, protective equipment, conference and training costs, home office running expenses, and motor vehicle travel between separate workplaces. The key rules are that the expense must be incurred in earning your income, not be private or reimbursed by an employer, and you must have a record. We maximise legitimate deductions while ensuring every claim is defensible.

Question 2

What is PSI and does it apply to me?

Accepted Answer

Personal Services Income (PSI) rules apply when an individual's income is mainly a reward for their personal efforts or skills. If you provide services through a company, trust or partnership and more than 50% of the income is for your personal labour, the PSI rules can treat that income as if it was earned by you personally — limiting deductions and the ability to retain income in the entity. Whether the rules apply depends on tests including results-based work, unrelated clients, and employing others. We assess your position and structure accordingly.

Question 3

How is locum income taxed?

Accepted Answer

Locum income is generally taxed as personal income, whether you're paid as an employee, sole trader or through an entity. If you operate as a contractor you may need an ABN, register for GST, and handle your own tax and super. PSI rules frequently apply to locums. We ensure locum income is correctly reported, GST is managed, and deductions are maximised.

Question 4

When do I need to register for GST?

Accepted Answer

You must register for GST if your gross annual turnover is $75,000 or more ($150,000 for non-profit taxi/ride-share drivers, who must register regardless). As a contractor or practice you may need to register voluntarily or compulsorily. We advise on registration, GST-free vs taxable supplies, and BAS obligations.

Question 5

What records do I need to keep?

Accepted Answer

You must keep records for five years from the date of lodgement or the relevant transaction. This includes income statements, receipts, invoices, bank statements, motor vehicle logs, and records of assets. Digital records are acceptable. Our portal makes storing and organising these straightforward.

Question 6

Should I operate as a sole trader, company or trust?

Accepted Answer

It depends on your income, PSI position, asset protection needs and long-term plans. Sole traders are simplest but offer no asset protection. Companies cap tax at 25–30% but PSI rules and Division 7A can limit benefits. Trusts offer flexibility and asset protection but have distribution requirements. We recommend a structure based on your specific circumstances — there is no one-size-fits-all answer.

Question 7

What is a service entity or service trust?

Accepted Answer

A service entity provides support services (premises, equipment, administration) to a medical practice and charges a fee. Properly structured, this can legitimately split income and provide asset protection. The ATO scrutinises service entity arrangements closely, so fees must be commercially reasonable and well-documented. We set up and review service entities to ensure they're compliant and effective.

Question 8

What is Division 7A?

Accepted Answer

Division 7A treats certain payments, loans and forgiven debts from a private company to its shareholders or associates as unfranked dividends — taxed in the recipient's hands. It commonly affects doctors who use companies. Managing Division 7A requires loan agreements, minimum yearly repayments, and careful timing. We manage Division 7A compliance as part of ongoing engagement.

Question 9

Can I distribute trust income to family members?

Accepted Answer

Trustees of discretionary trusts can distribute income to beneficiaries, which can be tax-effective where family members are on lower marginal rates. Distributions must follow the trust deed, be made by resolution before 30 June, and be genuinely entitlements (not sham). Minors are taxed at penalty rates on unearned income above thresholds. We prepare trust distributions correctly each year.

Question 10

What should I check before buying a medical practice?

Accepted Answer

Key areas include the practice's financial performance, patient base and retention, staff and associate arrangements, lease and premises, provider numbers, compliance history, goodwill valuation, and any outstanding liabilities. We conduct financial due diligence and help structure the purchase to protect you. A poorly bought practice can take years to recover from.

Question 11

How is a medical practice valued?

Accepted Answer

Practices are typically valued on a multiple of maintainable earnings (EBITDA), with adjustments for goodwill, equipment, location, patient demographics and associate arrangements. Different medical specialities and locations command different multiples. We provide independent valuations grounded in real medical-practice data.

Question 12

Should I buy or lease medical equipment?

Accepted Answer

It depends on cashflow, tax deductions, the equipment's useful life, and technology obsolescence. Leasing preserves cash and may offer deductible payments; buying builds an asset and allows depreciation. We model both options against your tax position and cashflow.

Question 13

What is the difference between goodwill and equipment in a practice sale?

Accepted Answer

Goodwill is the intangible value of the practice's reputation, patient base and earning capacity. Equipment is the tangible assets (medical and office equipment). They're treated differently for tax and GST — goodwill is generally GST-free for going concerns, while equipment may be subject to GST. We structure sale components tax-effectively.

Question 14

Should I start an SMSF?

Accepted Answer

An SMSF can offer control, investment flexibility and estate-planning advantages for doctors with sufficient balance (typically $200,000+) and the time to manage it. But it carries responsibilities, costs and compliance obligations. We help you assess whether an SMSF suits your circumstances and set it up and administer it correctly.

Question 15

How much can I contribute to super?

Accepted Answer

Concessional (pre-tax) contributions are capped at $30,000 per year (2024–25), and non-concessional (after-tax) at $120,000 per year (or $360,000 under the bring-forward rule, subject to your total super balance). Exceeding caps triggers excess contributions tax. We plan contributions to maximise tax savings without breaching caps.

Question 16

Can my SMSF buy property?

Accepted Answer

Yes, including business real property such as a medical practice premises, and via a limited recourse borrowing arrangement (LRBA) for other property. Strict rules apply around related-party acquisition, use, and valuation. Breaches can make the fund non-compliant. We advise on compliant SMSF property strategies.

Question 17

What is the super guarantee and who pays it?

Accepted Answer

Employers must pay superannuation guarantee (currently 11.5%) on top of salary for eligible employees. If you operate through a company, your company must pay your super on your salary. Contractors paid mainly for labour may also be entitled. We manage super obligations for practice owners and their staff.

Question 18

How often do I lodge a BAS?

Accepted Answer

GST reporting frequency depends on your turnover: monthly if over $20 million, quarterly or monthly by election otherwise. PAYG withholding and instalments have their own cycles. We determine your cycle and prepare and lodge BAS on time to avoid penalties.

Question 19

Are medical services GST-free or taxable?

Accepted Answer

Most services provided by medical practitioners that are covered by Medicare or meet the definition of a GST-free health service are GST-free. Cosmetic and some other services may be taxable. Getting this right matters for pricing and BAS. We advise on the GST treatment of your specific services.

Question 20

What is Single Touch Payroll and do I need it?

Accepted Answer

STP requires employers to report salary, tax withheld and super to the ATO each pay cycle through STP-enabled software. It applies to all employers. We set up and run STP-compliant payroll for medical practices.

Question 21

What is payroll tax and when does it apply?

Accepted Answer

Payroll tax is a state tax on wages above a threshold, which varies by state. It applies when total Australian wages exceed the threshold in a state. Grouping rules can combine related entities. Contractors paid for labour may be included. We monitor thresholds and manage payroll tax for practices.

Question 22

What happens during an ATO audit?

Accepted Answer

Audits range from targeted reviews to full examinations. The ATO requests records, explanations and supporting documents. Penalties and interest can apply to shortfalls. We manage the audit process, liaise with the ATO, and ensure your position is properly presented — early and accurate responses materially affect outcomes.

Question 23

What are the penalties for late lodgement?

Accepted Answer

The ATO applies failure-to-lodge penalties that escalate with delay and the size of your practice. Interest on unpaid tax also applies. Agents can often remit first-offence penalties for clients with a good lodgement history. We prioritise on-time lodgement and manage any ATO debt.

Question 24

Can I negotiate an ATO debt payment plan?

Accepted Answer

Yes. The ATO offers payment plans for genuine inability to pay by the due date. Interest still accrues. We help structure a realistic plan and can sometimes negotiate remission of interest. Ignoring ATO debt leads to garnishees and Director Penalty Notices.

Question 25

Is the client portal secure?

Accepted Answer

Yes. Your data is stored encrypted with role-based access and a full audit trail. Only you and authorised Doctors Accounting staff can access your information, and we never share it with third parties without your explicit consent.

Question 26

How do I upload documents?

Accepted Answer

Log in to the client portal, go to My Documents, and upload files directly. We automatically classify and store them against your records. You'll only be asked to provide documents when they're genuinely needed.

Question 27

How will I be contacted?

Accepted Answer

We contact you through the secure portal and by email. We don't bombard you with messages — only when action is needed, a matter has changed, or a genuine opportunity or obligation arises.

Question 28

Who can see my financial information?

Accepted Answer

Only you and the Doctors Accounting team supporting you. Internal advisory opportunities, scores and classifications are visible to staff only — never shared with third parties or used for marketing without your consent.

Answers for medical professionals

Tax

Accounting & Structures

Practice Ownership

Superannuation & SMSF

BAS, GST & Payroll

ATO & Compliance

Portal & Security

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