Doctors and dentists ― income

By Tolley in association with Julie Butler
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The following Owner-Managed Businesses guidance note by Tolley in association with Julie Butler provides comprehensive and up to date tax information covering:

  • Doctors and dentists ― income
  • Types of income
  • Employment status
  • Fees paid to an employee by private sector
  • Cremation fees
  • Personal awards

Types of income

When considering a GP’s or GDP’s income, it should be appreciated that their income may be made of different types of earnings. In addition to this, within each self-employment or employment, they may have income determined with reference to various entitlements or expenses.

This is perhaps more important to consider when communicating with a client as they may fail to see the relevance of a distinction between items, or see relevance where there is none. HMRC has been responsible for a number of ‘civil investigations’ against medical professionals, after its intelligence suggested widespread abuse of tax legislation by the profession as a whole. Many of these investigations arose from the Tax Health Plan (THP) disclosure scheme that ran until 2010, and HMRC continues to be especially vigilant where the medical profession is concerned.

Earnings received by a doctor or dentist may include any of the following:

  • salary received from the NHS
  • expenses in connection with an employment with the NHS
  • self-employed income from the NHS on the basis of the relevant statement of financial entitlement
  • supervision fees
  • inducement payments
  • payment from the NHS relating to rent for use of home or provision of a surgery
  • self-employed income from private patients
  • cremation fees. This is a fee paid by a crematorium for certification allowing for them to dispose of a body.
  • improvement grants for development of premises

This list is by no means exhaustive and employments, or ‘appointments’ within the NHS, may take many forms. This note focuses primarily on types of income for services, whether that income is treated for tax purposes as employment income or income from a profession or vocation.

For more about how constituent income is treated,

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