Commercial impact of revised tax treatment of GMS income of GPs

At the recent meeting of Main TALC, representatives were asked to provide feedback on the commercial impact of the revised tax treatment of General Medical Services (GMS) income of General Practitioners (GPs), effective from 1 January 2024. 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).  

From engagement with members on the issues, CCAB-I is concerned that the practical difficulties of the implementation of the revised tax treatment will cause significant complexities for partners and employees, increasing the administrative burden on GPs and potentially leading to some GPs either deferring taking up GMS contracts or handing back existing GMS contracts. In our view, the proposed changes to the tax treatment of GMS income do not reflect the commercial realities of the GMS contracts themselves. 

The changes that will be required for medical practices to comply with Revenue’s proposed tax treatment of GMS income of GPs are contrary to the Primary Care/Partnership GP model that the HSE and Government are advocating. CCAB-I is concerned that the commercial impracticalities of the proposed tax treatment will not only affect the individual GPs tax position but will ultimately impact patient services. While the full impact may not be felt until 12 to 18 months from implementation, this change will most likely lead to irreconcilable (and unnecessary) damage to General Practice and patient care. We therefore recommend that Revenue do not proceed with the implementation of these proposals. 

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.