ATO Practical Compliance Guideline PCG 2021/4 sets out the ATO's compliance approach to profit allocation arrangements in professional firms. It applies to Individual Professional Practitioners (IPPs) — such as accountants, lawyers, doctors, engineers, architects, and financial advisers — who operate through a practice entity (company, trust, or partnership) and allocate some or all of their share of the firm's profits to associated entities rather than receiving all income personally. PCG 2021/4 replaced the previous 2017 guidelines and introduced a two-Gateway and three Risk Assessment Factor (RAF) framework to categorise arrangements into GREEN (low risk), AMBER (medium risk), or RED (high risk) zones. ChangeGPS Professional Firm Profits implements this framework to help accountants assess their clients' arrangements and document the outcome.
What is PCG 2021/4 and who does it apply to in Professional Firm Profits?
Understand how PCG 2021/4 applies to professional firm profits, including Gateway assessments, RAF scoring, and risk outcomes.