Allied health valuations that separate the practitioner from the practice.

An allied health practice valuation determines the market value of a physiotherapy, psychology, podiatry, occupational therapy or similar practice — and, critically, how much of that value is transferable rather than personal to the principal clinician. Prismi prepares evidence-led, senior-reviewer-signed valuations for practice sales, associate buy-ins, small business CGT concession claims, family-law matters and restructures, concluding at the most supportable position within a defensible range.

When an allied health practice needs a valuation

Most allied health valuations are triggered by a transaction or a statutory requirement: a practice sale, an associate buying in, a principal exiting under the small business CGT concessions (Division 152 ITAA 1997), a restructure under Subdivision 328-G, a family-law property settlement, or a related-party transfer where the market value substitution rule (s 116-30) applies. In every one of those settings the number will be tested by someone whose job is to disagree with it — the ATO, the other side's lawyer, or the incoming buyer's accountant. The valuation therefore has to be built on evidence a reviewer can follow, not a multiple asserted from a broker's rule of thumb.

• ·Sale of the practice to an incoming clinician or corporate group
• ·Associate or partner buy-in and buy-out valuations
• ·Small business CGT concession claims on exit — Div 152, including the active asset test (ss 152-35 and 152-40)
• ·Family-law property settlements where the practice is a principal asset
• ·Restructures from sole trader or partnership to company or trust (Subdiv 328-G rollover)
• ·Related-party transfers where the ATO can substitute market value (s 116-30)
• ·Division 7A ITAA 1936 matters where practice value affects loan and distribution positions

Separating you from your practice: where the valuation is won or lost

In a principal-clinician practice, some of the goodwill belongs to the business and some of it walks out the door with you. Personal goodwill — patients who rebook because of the individual clinician, referrers who refer to a name rather than a clinic — is not transferable and cannot honestly be sold, taxed or divided as if it were. Transferable practice goodwill — the brand, the location, the systems, the treating team, the referral relationships that survive a change of owner — is what a willing-but-not-anxious buyer under the Spencer v Commonwealth principle actually pays for. Every allied health valuation Prismi prepares documents this split explicitly, with the evidence for each side, because it is the first thing a sceptical reviewer attacks. A valuation that ignores the distinction produces a number that looks impressive and collapses under review.

Rebooking and recall rates: proof the revenue survives a handover

Maintainable earnings in an allied health practice rest on whether patients come back when the principal is not the one treating them. Rebooking rate, recall conversion, average visits per episode of care and the share of appointments delivered by non-principal clinicians are the practice-level evidence of transferable revenue. A clinic where associates deliver most of the consultations and rebooking rates hold across practitioners supports a materially stronger goodwill position than one where the principal's diary is the business. Practice management systems hold this data as standard reports; part of the engagement is extracting and presenting it so the working file shows, rather than asserts, that revenue is maintainable under new ownership.

Referrer and payor concentration: who actually controls the revenue

Allied health revenue rarely comes from one place. A typical file shows a mix of GP chronic disease management (CDM, formerly EPC) referrals, NDIS participants — plan-managed, self-managed or agency-managed — workers compensation insurers, DVA, private health fund rebates and full-fee private patients. Each channel carries different risk. CDM referrals often concentrate around a handful of referring GPs; if a large share of new patients traces to one general practice, that is referrer concentration and it caps the supportable multiple. NDIS revenue depends on plan continuity and scheme pricing arrangements. Workers compensation and DVA work is fee-scheduled and administratively heavy but tends to be sticky. The valuation maps revenue by payor and by referrer, because a buyer — and the ATO — will.

Contractors, service entities and the exposure hiding in the structure

Psychology practices in particular commonly run associate models: clinicians engaged as contractors paying a facility or service fee to a service entity, rather than employees on wages. The model affects the valuation twice. First, the margin — a service-fee model earns the practice a percentage of billings rather than the full clinical margin, and maintainable earnings must reflect the arrangement as it actually operates. Second, the contingent exposure — contractor arrangements in health practices have been an active area of payroll-tax scrutiny in several states, and reclassification risk, with payroll tax, superannuation and entitlements applied retrospectively, is a liability a diligent buyer prices in. The valuation identifies the exposure where the file supports it; whether the structure itself is compliant is a matter for the practice's accountant and lawyer. Prismi prepares independent valuations only and does not provide tax or legal advice.

The principal's wage: normalising for the hours you actually treat

Where the principal treats 30-plus hours a week, draws a modest wage and takes the rest as profit, the reported earnings overstate what a buyer would earn — because the buyer must pay a market-rate clinician to do that work. Owner-clinician wage normalisation replaces the principal's actual drawings with a market salary for the clinical hours worked, plus a management loading for running the practice. The adjustment is often the single largest normalisation in an allied health valuation and frequently converts an apparently profitable practice into a marginal one. It is also the adjustment most often done badly: a defensible file documents the hours, the role and the market benchmark used, so a reviewer can trace the number rather than take it on faith.

Which engagement tier fits an allied health practice

For an internal benchmark or an early succession conversation, Essential (from $1,495 + GST, 10–14 business days) is usually sufficient. Most allied health engagements — practice sales, associate buy-ins, Div 152 concession claims — sit in Comprehensive (from $3,995 + GST, 15–25 business days), which carries the full goodwill-split analysis and normalisation schedule. Where the valuation will face an adversarial reader — an ATO review, a family-law matter, a disputed partnership exit — the Defensible Valuation File (from $8,995 + GST, 25–35 business days) documents every input to an evidentiary standard, prepared under APES 225 with IVS 104 market value as the basis. Retrospective valuations at historical dates attract a $495 surcharge per date, and additional entities — a common feature of service-entity structures — are $750 each. Fees are fixed at engagement and never contingent on the outcome. If a client needs the number to land somewhere specific, we will say so and decline the engagement on those terms.