The Queensland Revenue Office will stop issuing retrospective tax demands that predate the 2021/22 financial year, meaning GP practices in the state will no longer face debt notices for years of unpaid tax.

Practices across NSW, Victoria and Queensland have been dealing with the backdated debt notices based on a legal interpretation that GPs are employees rather than contractors, with some practices reporting bills running to millions of dollars.

However, on Sunday, AMA Queensland said it had received an update from the Queensland Revenue Office confirming it would no longer issue retrospective debt notices predating the most recent financial year.

AMA Queensland president Dr Maria Boulton said the change would be the difference between practices surviving or shutting down.