Revenue has been examining the tax treatment of GMS income assigned by employed GPs to GP practices and considering whether this income should be taxed as Schedule D Case II income in the hands of the employed GP.
Revenue’s view for the year 2024 onwards is that there is no legal basis to treat income belonging to an individual GP as income of another person/medical practice for tax purposes.
A recent Revenue Note outlines their position in relation to bona fide arrangements whereby a GP may have mandated that GMS payments are paid to a medical practice in circumstances where either:
- the GP is employed by the medical practice concerned and receives a salary from that practice, which is payable subject to PAYE or
- the GP is a partner in the medical practice concerned and receives a share of the partnership profits.
In these cases, Revenue confirms that a GP who holds a GMS contract:
- Is a chargeable person as regards income arising under the contract and should report that income under the self-assessment system and
- Is the specified person for the purposes of PSWT and, therefore, is the person who may, where the relevant criteria are met, claim a credit for PSWT deducted on a GMS payment. A credit may not be claimed by any other person including a medical practice.
In circumstances where a GP who holds a GMS contract has incorporated his or her medical practice the tax treatment outlined above will be applied in respect of his or her GMS income for all tax years.
Discussions are ongoing with Revenue who will publish soon an updated Tax and Duty Manual in relation to the tax treatment of GMS income of GPs.