The ATO has released late December 2025 a new Practical Compliance Guideline PCG 2025/5, which is a noteworthy update affecting professionals who operate through companies or trusts — including doctors, specialists, consultants and allied health practitioners. This guideline outlines how the ATO will apply Part IVA, being the general anti-avoidance rules, to Personal Services Businesses (PSBs)
Traditionally, passing the Personal Services Income (PSI) tests meant the structure was broadly acceptable from a tax perspective. However, PCG 2025/5 makes one key point clear:
Passing the PSI rules does not automatically protect an arrangement from anti-avoidance scrutiny.
The ATO is concerned that some PSB structures are being used to separate personal services income. This means income generated from an individual’s skills or labour is distributed, retained, or split to achieve lower overall taxation.
The ATO acknowledges PSB structures are common across professional industries, including healthcare, but expects good record keeping and to understand the risks associated with arrangements involving the potential alienation of PSI through a PSE that is conducting a PSB.
Due to the complexities with assessing the PSB rules we recommend you contact our medical accountants if you are concerned about how you are structured to ensure you are compliant with this new guideline.