Last week, the Institute, under the auspices of the CCAB-I, wrote to the Taoiseach, Leo Varadkar T.D., and the Minister for Finance, Michael McGrath T.D., to express our members’ concern about the tax treatment of General Medical Services (GMS) income of General Practitioners (GPs) which will change from 1 January 2024. The CCAB-I and other bodies have been discussing this matter with Revenue over the past two years through the Tax Administration Liaison Committee (TALC) forum.
As previously reported, GPs in a medical practice, be they principals, partners or employees, will be required to self-assess for tax purposes on the GMS income earned in their name, with a credit for the attaching professional services withholding tax (PSWT).
Our members are concerned that taxing the GMS income of GPs in this manner does not make provision for the practice-wide scope of the GMS contract and will result in complex administrative procedures for medical practices where income is allocated between GPs and the practice depending on who treats certain categories of patient.
In addition, certain GPs employed by medical practices, that previously were simply subject to PAYE on their salary, will now also be subject to self-assessment on their GMS income. They will be required to file income tax returns and pay preliminary tax, while at the same time continuing as an employee of the practice. They may also be exposed to the 3 percent USC surcharge as self-employed individuals.
In light of such practical difficulties, CCAB-I requested that the tax treatment of income earned under contract by individuals acting on behalf of a practice be assessed on the principal or partners of the practice.
Revenue has confirmed that it will publish an updated Tax and Duty Manual in the coming weeks, in relation to the tax treatment of GMS income of GPs. CCAB-I will continue to liaise with Revenue and will inform members via Tax News.