Family-run GP business could face nine-year backdated payroll tax bill

The cost of accessing historical financial records added to the burden, said managing director Grace Sia.
Sarah Simpkins
Dr Martin Sia (left) with his daughter, Grace Sia.

A GP practice group with 76 GPs says it faces the prospect of a nine-year backdated payroll tax bill that will possibly run to millions of dollars.

Grace Sia, the managing director of the Sia Medical Centre corporation, said the group of eight practices was first audited back in 2018 over staff payments for the previous five years.

Victoria’s State Revenue Office paused the audit when the COVID-19 pandemic hit.

When it restarted, it was expanded to cover GP payments over the same period, Ms Sia told AusDoc.

“COVID-19 hit and they went quiet for four years, and then they came back a couple of months ago … coming after doctor payments,” she said.

“They want to go back nine years for doctor contractor payments, which is ridiculous.

“They started the investigation on the staff side, but now all of a sudden, they want to go back that far for doctors.”

Her father, Dr Martin Sia, founded the group’s first practice decades ago.

The group has estimated it could face a payroll tax bill of between $2 million and $5 million for payments to GPs over the nine years, based on Victoria’s payroll tax rate of 4.85%.

How much the business faced in interest and penalties for late payment were unclear, Grace Sia said.

She said that gathering the historical financial data demanded by revenue officials was costly.

“I do not know where we are going to get this information from because we have changed accountants and bookkeepers throughout the years as we have grown.

“We have to pay $1000 per site for the historical information just to open up the data from previous software applications we have used.

“That does not include the time for bookkeepers to go back to extract information.”

She said the business had already paid $45,000 to consultants and advisers in just a few months and expected to pay more.

“We are not even close to finalising this issue,” she said.

She said she was determined to keep the practices open, but it could mean raising consultation fees by up to $20 to cover the tax bill and consultancy fees.

“We will do whatever it takes to not close because we have got too many good relationships, too many people to take care of.”

“We will have to increase prices across the board. That is something all clinics will eventually do if payroll tax is going to happen.”

Victorian Treasurer Tim Pallas recently said he would be “inclined” to use his discretionary powers to save GP practices from closure.

But Ms Sia said Victoria could still choose to follow Queensland and SA with a tax amnesty.

“How does the Treasurer decide which clinics to save and which clinics not to save? Just give us an amnesty.”

A spokesperson for the Victorian government said the state revenue office’s “standard approach for investigations of unpaid tax is to consider the year in which the investigation commences, plus the preceding 4 years.”