Doctors and dentists ― income

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley 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.

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

  1. salary received from the NHS

  2. expenses in connection with an employment with the NHS

  3. self-employed income from the NHS on the basis of the relevant statement of financial entitlement

  4. supervision fees

  5. inducement payments

  6. payment from the NHS relating to rent for use of home or provision of a surgery

  7. self-employed income from private patients

  8. cremation fees. This is a fee paid by a crematorium for certification allowing for them to dispose of a body.

  9. 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, see the Doctors and dentists ― self-employed income guidance note.

Employment status

The general principles that apply to employment status, outlined in the Establishing employment status guidance note, are equally applicable to doctors and dentists and this may be one of the areas HMRC considers the perceived ‘widespread abuse’ may be occurring in.

Many doctors and dentists may also consider trading through a limited company. While there have been changes to the dividend rates of taxation recently and changes to the treatment of goodwill on incorporation,

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