Profits of Professional Services Firms Webinar

The ATO’s updated guidance on dealing with professional firm profits has caused many practitioners to reconsider how profits are allocated to themselves and their related parties. The Profits of Professional Services Firms Webinar explores the impact of the ATO’s guidance and how to determine the risk level that applies to practitioners.

The final guidelines applied for the first time in the year ending 30 June 2023 for many practitioners, although some practitioners have been able to take advantage of transitional arrangements. The transitional period ends on 30 June 2024 which means that many firms and their principal practitioners are still trying to determine what needs to be done to achieve a low-risk rating.

The ATO has signalled its clear intention to delve into arrangements and business structures commonly used by accountants, lawyers, medical practitioners and other professionals. The ATO is specifically concerned with professional practices operating through trusts, companies and partnerships of discretionary trusts and how the profits from these practices are being taxed.

Professional firms have clearly been put on notice that Part IVA could potentially apply depending on how profits of the firm are dealt with. Now is the time to act.