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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Doctors and dentists: basis of assessment: NHS

Doctors and dentists working under the National Health Service Acts may be either employed or self-employed. The employment status of doctors and dentistry staff are considered at ESM4060 and ESM4031 respectively,

General medical practitioners and general dental practitioners who work for the NHS will typically be operating a profession or a vocation which is taxable as trading income.

General medical practitioners operate under a contract for General Medical Services (GMS) which is approved by the Primary Care Trust for their location. Similarly, dentists who provide services for the NHS will have a contract for General Dental Services (GDS).

The contracts given to doctors and dentists, where they act as principal, provide that earnings are derived from a formula including elements for number of patients and performance. The performance element provides for remuneration under the Quality and Outcomes Framework (QOF). The contracts also provide for reimbursement of specific expenses.

A dental practitioner may be included in the General Dental List only if he or she undertakes to provide a general dental service as a principal. A dental surgery may serve a number of dentists, each responsible professionally as a principal. The common services, receptionists and nursing staff for the surgery will be provided by one of principals, or between several principals acting in partnership. In such circumstances the provision of common services etc may be regarded as an extension of the professional activities of the dentists providing them.

The standard form of agreement for dentists practising as principals, in premises run by another practising dentist, has been approved by the British Dental Association.

However, where a doctor or dentist does not hold such a contract, the facts of the case will need to be considered. If they have a contract of employment, their earnings will be taxable as employment income and subject to PAYE.

As regards, doctors and dentists who hold part-time hospital appointments, see BIM54035.