Deciding to open your own practice is exciting! However, there’s a long list of things you need to consider. We’ve summarised the main issues to help you understand what you need to consider in your journey ahead.

Structure

It’s important to get off to the best start and consider your legal and tax obligations, as well as your plans for the future. The main structures to choose from when starting your medical practice are:

• sole trader
• trust (including unit trust, discretionary trust or family trust)
• company and partnership
• any combination of the above structures.

There are multiple issues to be considered when making decision about practice structure. These include:

• taxation obligations
• liability limitation
• capital requirements
• cost and complexity to set up and run
• flexibility
• your future plans and exit strategy
• asset protection
• control.

GST

Income derived from medical fees is generally GST free. However, this does not apply to any rent you might derive if you let a room at your practice, or any management fees you deduct on behalf of your practitioners. GST must be remitted to the Australian Taxation Office (ATO) either monthly, quarterly or annually depending on your turnover.

You are able to claim back from the ATO any GST you paid on business purchases. This will reduce your GST liability, and may even result in a refund.

Employees

In order for your business to grow it’s likely you will need some help. Employees are covered by both national and state legislation, the main one being the Fair Work Act. Employees have rights and entitlements including:

• minimum wage
• sick, annual, long service, and other leave types
• superannuation guarantee
• protections at work.

Any wages you pay will be subject to PAYG withholding, which will have to be paid to the ATO in your monthly or quarterly activity statement.

Your entity will also be required to organise and pay workers compensation insurance for any employees, as this is compulsory in every state in Australia.

You will also need to consider:

• which practice management software, and bookkeeping software will best meet your needs
• whether it’s more advantageous to own or rent your premises (and the GST implications of either choice)
• how you’re going to finance your practice and whether you want to retain funds in the business, or withdraw any profits made
• how you will structure your practice fees
• whether you need a budget
• what insurances you require

AFS have a team of specialists who can guide you in setting up your medical practice and make your start up as smooth as possible. If you have any questions, or would like assistance with your medical practice, contact Regan Smith on 03 5443 0344 or email afs@afsbendigo.com.au