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Revenue decision which disadvantages GPs to be reversed in Finance Act – Burke

16th November 2023 - Colm Burke TD

A decision by Revenue which sees practice doctors treated as individuals rather than as part of a partnership and sees them disadvantaged will now be reversed, according to Fine Gael TD Colm Burke.

Deputy Burke, Fine Gael’s Health spokesperson, said: “I was contacted by a large number of General Practitioners who became aware of the decision by Revenue to treat their income under the General Medical Scheme as individual income as opposed to treating it as partnership income where the partners are in a partnership arrangement.

“This will now be reversed by an amendment to the Finance (No. 2) Bill 2023.

“We already have a challenge in getting GPs in many rural areas and in some cases those that are retiring are not being replaced. This serves as a disincentive for people to stay practicing in the GMS.

“If the decision of Revenue was to be implemented a GP who may do 70% of work through the General Medical Scheme will have a larger tax liability from Revenue Commissioners, compared to his partner in the practice who does the remaining 30% of work through the scheme and the rest through private practice.

“The Revenue decision was unworkable and would have penalised doctors. The income that comes in under the GMS contributes to the practice costs and paying salaries.

“All the income that comes through the GMS goes into a central account and that account is used to pay the expenses of the practice as well as paying the salaries.

“Accountancy bodies estimated that up to 91% of GPs would have been affected directly as a result of the Revenues interpretation, as the vast majority of GP’s are in some form of a partnership where there are clear rules regarding the payment of salaries and tax.

“This is a matter that I recently raised in the Dáil with the Minister for Finance. It was stated that a GP who holds a GMS contract is, under tax legislation, a chargeable person as regards income arising under the GMS contract.

“In order to find a solution to this issue, discussions have taken place between officials in the Department of Finance, Revenue, the HSE and the Department of Health.

“I’m pleased to confirm that the Minister for Finance signalled his intention to table an amendment on Report Stage of the Finance Bill 2023 to provide that where individual GPs enter into contracts with the HSE to provide certain medical professional services in a partnership with other individual GPs, the income from those professional services can be treated for income tax purposes to be that of the partnership.

“It was also noted that there could be scope for the Department of Health and HSE to examine the issue from a contractual viewpoint as part of their ongoing strategic review of general practice.

“Hopefully the change provides a positive outcome for GP’s operating in the scheme,” Deputy Burke concluded.

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