ATTEMPT TO PAY LESS TAX

Press, Volume XCVIII, Issue 29061, 25 November 1959, Page 25

ATTEMPT TO PAY LESS TAX

Doctors’ Scheme Fails (N.Z. Prest Association—CowngM) SYDNEY, Ntwember 24. Because the Taxation Department will not recognise doctors as “companies,” nearly 1000 doctors in New South Wales will each receive a demand for about £2OOO The doctors formed themselves into private companies to escape taxation at personal exertion rates. The managing director of a leading taxation consultant firm said the department’s ruling was certain to be challenged before the Taxation Board of Review. The .Taxation. Commissioner (Sir Patrick McGovern) ruled in September that the doctors’ scheme was ineffective in law. First assessments are about to be sent to the doctors, who are expected to take immediate action for appeal. Interviewed in Canberra, Sir Patrick McGovern said he would offer no official comment on any action his officers had taken. But if they had acted against the doctors, he would back up the action. One Sydney taxation consultant has completed more than 550 returns for doctors under the company system. All the returns wjll be ruled invalid now. As private companies, which the doctors paid £l5O to form, they made their dependants shareholders and split their earnings between them. The doctor then drew a wage of say £l5OO as a worker employed by the company. A doctor earning £4OOO a year with a wife and two children as his dependants would save' £5OB if ruled as a company. Earning £9OOO, he would save £lB5l and on £20,000 his gain would be £4795. ’ The Assistant Secretary of the B.M.A. (Dr. Hugh. Hunter) said today he could not make any comment on what action, if any, would be taken to challenge the Taxation Department’s ruling.