Business Structure
Whether you are a sole practitioner starting out or a well-established medical practice, having the right structure ensures you have the following attributes:
- Tax Minimisation – are you paying more tax than what you should be paying?
- Asset Protection – is there appropriate segregation between your private wealth and business wealth ? Are your assets unnecessarily exposed to creditors?
- Limited Liability – do you have the ability to walk away from a failing business with limited recourse?
- Succession Flexibility – how easy is it to transition to the next generation or bring in new owners?
If you are missing one of these aspects, then chances are, your business is not trading at its most optimum position and Empire Accountants can assist you with navigating through Income Tax, Capital Gains Tax (CGT), Goods and Services Tax (GST) and transfer duty considerations to allow a change in structure.
WARNING: if your current structure is a partnership of trusts, you are at risk of an audit from the ATO. This was announced by the ATO back in November 2013 (refer to taxpayer alert TA 2013/3) and if there was no commercially sound reason behind the establishment of this particular structure, then significant penalties can apply.
Tax Compliance & Reporting
Australia has one of the most complex tax systems in the world. There is pretty much a tax for everything you do. But for medical practitioners, the ATO bumps up the complexity a few more notches by introducing industry specific anti-avoidance rules. Have you considered, or do you even know about the following:
- Personal services income rules for medical practices – are you paying out the correct amount of personal service income to yourself?
- Professional practice benchmarks – have you done enough to ensure you are considered a low risk medical practice by the ATO to avoid further audit activity?
- GST implications on medical services – consider all your services you provide, do they meet the requirements to be classified as a GST free supply?
- Service entity standards for labour and equipment hire – are your hire fees charged at the correct rate/price?
- Part IVA anti avoidance – are any of your activities predominately tax driven? If so, the ATO will cancel any tax benefits and may apply significant penalties.
- Division 7A provisions – do you have a related loan to a company? Chances are, you are subject to these rules and non-compliance can mean adverse tax consequences.
At Empire Accountants, we have a dedicated medical services specialist who understands your industry back to front and will ensure your business is flying under the ATO’s audit radar! Leave it to us.
Business Valuations / Purchasing or Selling a Practice
Understanding the valuation methodology for your business can go a long way to assisting you with taking steps to ensure you are maximising the value in your current practice. We can assist you with strategies to improve your bottom line and business succession planning so that you can achieve your desired sale price.
If you are looking to buy into an existing practice or are looking to expand your reach inorganically, via mergers and acquisitions, Empire Accountants can hold your hand through the process and ensure you will be paying a fair price for your investment.
Equity and Wealth Protection
It is common for medical practitioners to accumulate and build wealth quite quickly throughout the years, and a good accountant will ensure you continue to do so. But a great accountant will also consider protecting that wealth from creditors so you can continue to reap the benefits of your hard earned work and ultimately pass this wealth to the next generation. Techniques we can help you apply to achieve optimal protection include:
- Gift and loan back strategies
- Investment trusts and negatively geared trusts
- Wealth accumulation and asset protection via SMSF’s
- Related party debtor loans minimisation
- Debt and loan forgiveness strategies
When you’re doing what you do best (in your case, saving lives) tax and accounting should be the least of your worries. Secure your liberation by booking a consultation and we can start your journey to building a Medical Empire today!
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