Our latest insights

As professional services firms sharpen their focus on growth, scalability and succession, they’re beginning to revisit whether their existing operating structure is still fit for purpose. Changing your structure should be a strategic decision that can influence risk management, capital allocation, talent retention and long-term legacy, incorporation goes beyond a tax discussion.

The ATO has made it clear that the professional services industry is in the spotlight as we head into 2026. With PCG 2021/4 now fully in effect as of 1 July 2024, the question is no longer if the ATO will review your arrangements, it is now a question of when. Is your firm ready?

Following on from the ATO’s guide to professional services firms’ allocation of profits in PCG 2021/4, the ATO has now further tightened its compliance scrutiny of individual professionals’ ability to assign or stream income away from themselves to family members by releasing its compliance approach to so-called Everett assignments.

Released on 16 December 2021, the ATO has finally released its final Practical Compliance Guideline PCG 2021/4 for the allocation of professional firm profits.

The ATO has published the long awaited draft revision of the Practical Compliance Guideline PCG 2021/D2 for the allocation of profits by professional firms.

Modern Australia has a vibrant knowledge economy. Highly skilled lawyers, accountants, engineers, architects, consultants and business managers contribute not only to our own economy but to the global one as well.

The professional services landscape has changed with COVID-19. The more agile the firm, the better placed they were to ride out the storm.

For the professional services industry, it seems as though we are on a growth trajectory. Work resulting from the Royal Commissions is keeping law firms at all levels on their toes and the infrastructure boom means our architects and engineers are more than busy.

Ben Matthews recently met with the Managing Partner of a mid-tier legal firm to discuss the struggles he was facing in trying to build a successful partnership, including attracting and retaining great people, optimising working capital, maximising tax efficiencies, retiring debt and funding investment.

The Australian Tax Office (ATO) issued its latest guidelines dated 25 June 2018 to professional services firms regarding its assessment of risk in respect to allocation of profits within such firms.

You may recall in 2014 that the ATO issued guidelines (which were finalised in 2015) providing safe harbour benchmarks (30% effective tax rate, 50% individual share of income or benchmark comparable senior employee remuneration) for acceptable profit sharing arrangements involving Individual Professional Practitioners and legally effective practice entities.