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When is a business not a business ...

Discussion in 'Accounting, Tax & Legal' started by armorris007, 14th Dec, 2009.

  1. armorris007

    armorris007 Member

    Joined:
    11th Jun, 2008
    Posts:
    6
    Location:
    Sunshine Coast, QLD
    My wife is a GP and is employed on a service contract basis.

    She (like most other GPs in Australia) has no option to be 'employed' and have the benefits that come associated with SALARIED type employment - as those contracts don't exist with Medicare.

    Instead she has to work as a contractor and provide her own cover for sickness, holidays, super, medical indemnity, registrations, training etc. She does her own marketing and provides most of her own tools of the trade.

    Thanks to medicare rebates - she earns less than the average plumber.

    And to top it off - with PSI rulings it seems the government wants to slap her on both cheeks and tell her she's not really a business.

    So my question is how does a GP get fair treatment under the tax system in this country?

    What is the best way of setting up a structure so that you can trade your GP services as a true business?

    If she was to get a determination from the ATO that she wasnt PSI restricted - could she claim kilometers between home and these practices?

    Thanks for your help!
     
  2. Intellikev

    Intellikev Active Member

    Joined:
    16th Dec, 2009
    Posts:
    28
    Location:
    Brisbane Qld
    When is a Business not a Business

    From what you have said your wife is a GP and receives income that is mainly a reward for personal efforts or skills.

    Your wife appears to meet the conditions of the results test. I would suggest you talk to a Tax accountant who specialises in this area and obtain a tax determination to clarify your wife's position.

    If the ruling is in her favor then she would be seen to be conducting a personal services business. the income from that business is therefore exempt from the personal services income (PSI) regime.
     
  3. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    I work with an accountant who has a handfull of GP clients in similar situations.

    He is based on the Gold Coast but travels to the Sunshine Coast on a regular basis to see clients up there.

    Let me know if you would like his contact details.

    You will not be charged for the initial consultation.
     
  4. Staph

    Staph New Member

    Joined:
    3rd Mar, 2007
    Posts:
    1
    Location:
    Sydney, NSW
    Perhaps a bit off topic but I'm just interested to know how much an average plumber earns. All my GP friends are earning $300k+ per annum.
     
  5. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    It depends on how much is cash and how much is declared :rolleyes:
    I'm sure we all know a tradie or two who deals in cash.... plumbers are certainly no exception.
     
  6. armorris007

    armorris007 Member

    Joined:
    11th Jun, 2008
    Posts:
    6
    Location:
    Sunshine Coast, QLD
    Thanks for the offer Superman - I think we've worked out a resolution already with a local accountant.

    Seems things are not as bleak as they first seemed.

    Cheers!

    Andy