Professional Services
Accounting for lawyers, consultants, and professional firms. ATO profit allocation compliance and practice management.
Professional Services Accounting
Specialist accounting for lawyers, consultants, accountants, engineers, and other professional firms, addressing ATO guidelines on profit allocation.
ATO Compliance for Professional Firms
The ATO has specific compliance guidelines for professional firms (Practical Compliance Guidelines 2021/4):
- Profit Allocation: The ATO monitors how profits are allocated among partners, principals, and associates
- Income Splitting: Arrangements must have commercial rationale and not be solely for tax minimisation
- Service Entity Arrangements: Structures using service trusts or companies must meet specific ATO guidelines
- Risk Assessment: The ATO uses a traffic light system to assess risk ??? arrangements in the high-risk zone may be audited
Our Professional Services Include
- Practice Structure Review: Partnership, company, trust, or incorporated practice analysis
- Partner and Principal Tax: Individual and entity tax planning for practice owners
- Profit Distribution: ATO-compliant profit allocation and distribution strategies
- Superannuation: Maximising concessional contributions for high-income professionals
- Workforce Planning: Employee vs contractor classification, payroll, and STP compliance
- Trust Accounting: Compliance with professional trust account regulations (especially legal)
- Insurance: Professional indemnity, public liability, and key person insurance
Industry-Specific Considerations
- Law Firms: Trust account compliance, legal professional privilege, costs disclosure
- Consulting Firms: Project profitability, utilisation rates, IP ownership
- Medical Practices: Medicare compliance, practice incentive payments
- Accounting Firms: Professional body requirements, peer review, quality assurance
- Engineering Firms: Professional indemnity, project accounting, R&D claims
Key Compliance Areas
- PAYG withholding for employees and contractors
- Professional indemnity and fidelity insurance
- Continuing professional development (CPD) tracking
- Anti-money laundering (AML) compliance
- Privacy Act and data protection obligations
Source: ATO ??? Professional Firms