Payroll tax liquidations: Is it a good idea?

Putting your practice into liquidation if you receive an unexpected tax bill is not a decision to be taken lightly.

Running a medical practice in Australia can be a rewarding experience, both personally and financially, if you get the balance right. As with any business, there are financial risks and challenges that must be managed. One of those that has come into focus since the Thomas and Naaz decision is the risk in the medical industry to receive an unexpected tax bill, in particular for payroll tax.

There have been industry commentators who have suggested that, as the services company running the medical practice operations is a separate legal entity from the doctor and the individuals involved, that medical practice owners should simply put the operating entity into liquidation and start again as a way to avoid paying the tax.