Owner-Managed Businesses

Doctors and dentists ― self-employed income

Produced by Tolley
  • 23 Jun 2022 10:22

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Doctors and dentists ― self-employed income
  • NHS income
  • Private income
  • Reimbursement of surgery expenses
  • Locum practitioners

Doctors and dentists ― self-employed income

NHS income

Medical and dental practitioners working for the NHS may be either employed or self-employed. The employment status of doctors and dentists is reviewed in the Doctors and dentists ― income guidance note. General medical practitioners and general dentist practitioners who are working for the NHS are generally self-employed and receive income from the NHS under contracts for services where the value of the earnings are derived from a formula which takes into account the number of patients and performance of the practice. The performance element includes allowances for elements relating to specific items under the Quality and Outcomes Framework (QOF).

Further to this, there are specific allowances relating to specific costs such as locums employed to cover maternity, paternity or sickness leave, dispensing, flexible care scheme, and so on. There are also supervision fees relating to the cost of training assistants, inducement payments for acting in certain areas and reimbursement of rents and rates for practice accommodation. These allowances are included within the practice receipts taxable as profits from a profession or vocation.

For example, where an element of the practice’s fees are calculated with respect to rent, this is still treated as profits of a profession. There is an advantage to be gained by treating earnings as rent, avoiding NIC, but reimbursement of premises costs do not constitute rental income. See below for more details.

Private income

Where a practitioner has private patients, the income will also be attributed to their profits from

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