Income tax: should a pharmacist return income amounts payable under the Pharmaceutical Benefit Scheme (PBS) on an accrual basis?

Yes. For taxation purposes a pharmaceutical chemist derives income from the supply of pharmaceuticals at the time of dispensing. Under the Pharmaceutical Benefit Scheme an approved chemist is entitled to payment by the Commonwealth of Australia for Pharmaceutical Benefits supplied. The supply of the pharmaceutical is the critical point of time at which the income can be accurately quantified by the pharmacist.