GPs and IR35

[stewamax]

Most GPs - the ones who work under the general medical services contract with the NHS - are self-employed (although in joint practices may operate as a partnership)
How do they avoid being caught by IR35 and then taxed as NHS employees?

[Alaric]

It doesn't apply to self employed people.

Am I right in thinking that notwithstanding their status, GPs participate in the NHS defined benefit scheme? Hence the difficulties for older GPs when the accrual of pension benefits runs them against Lifetime Allowance limits.

[stewamax]

It doesn't apply to self employed people. It only applies if you work via Limited Company (that's the "intermediary" that the "I" in IR35 is referring to).

Understood. But almost all GPs appear to be either partners in a joint practice so that among other things, they can cover for each other and share overheads, or are 'associates' which presumably means either they are employees or are freelance (i.e. can thus work elsewhere as well). I guess that the NHS pays a per-registered-patient capitation fee direct to a GP (who is taxed on this as personal income) but extras (from work by practice nurses for example, especially £per COVID jab done in the practice but not by the GP), are billed to the practice and earnings shared out in whatever way the practice agreement is with its directors/LLP partners/employees.

And practices are not necessarily owned by its partners: US health insurer Centene has barged into the market via its subsidiary Operose Health and is gobbling up practices. However, my recollection is that when the NHS was created, there was a legal restriction on buying or selling NHS practices. Has this changed? Or are Openrose et al just taking on the practice management - not a trivial job: my registered GP's practice has 5 partners and three associates, but also has a pharmacist, 4 admin managers,16 admin and reception, and 15 nurses and other health care assistants (some may be part-time but so may the GPs)

This is not a swipe at GPs - not a job I envy, but just seeking clarification on how the practices are run re 'employment'

[Alaric]

Understood. But almost all GPs appear to be either partners in a joint practice so that among other things, they can cover for each other and share overheads, or are 'associates' which presumably means either they are employees or are freelance (i.e. can thus work elsewhere as well).

The idea of IR35 was to restrict the ability of "workers" to structure their affairs so as to balance salary and dividends to minimise tax. It requires being the owner of a limited company to convert earnings into dividends.

Not specifically GPs but were a practice to buy in IT support, that might be provided by a one man company and depending on the circumstances IR35 might come into play.

[AF62]

Most GPs - the ones who work under the general medical services contract with the NHS - are self-employed (although in joint practices may operate as a partnership)
How do they avoid being caught by IR35 and then taxed as NHS employees?

Where IR35 *might* impact is the relationship between the GP supplying their services to the GP practice through a limited company and the GP practice itself.

Before April the decision about whether the person supplying their service was an employee or not was that person. Now it is the company receiving that service, with the issue that if they get it wrong then HMRC can now come after the recipient so they are being a lot more careful about the decision.

But with the IR35 question of whether someone is an employee or not; well the answer is it is complicated. Very, very complicated.

There has been a whole bunch of cases involving TV presenters and stars as to whether they were employees or not. Some HMRC won and the court found they were employees and some found against HMRC and they were not. With some of those decisions in opposite directions being almost on the same facts.

There are a whole number of tests and indicators as to employment status, but a couple of the major ones are substitution and control. Can you send someone else to perform the service and do you have control about how the service is carried out.

For TV presenters this is tricky. The TV company is generally unhappy if you sent someone else to present the ‘Famous Person Show’ and the director generally wants the star to do what they are told to do.

However for GP practices using locums then they just want a ‘body’ to carry out the surgery appointments so don’t care who is there doing the job, and the GP will generally decide how to carry out the appointment without being directed as to what to do by someone else.

My local GP practice is operated by a limited company which runs GP surgeries, ‘walk in centres’, and ‘urgent care centres’ across the UK. There don’t seem to be any permanent GPs with the whole operation run by locums - not that I care as it is easy to get an appointment, unlike the previous GP practice I used which was run as at traditional partnership and it was impossible to get an appointment.

[TonyB]

Stewamax, for all intents and purpose Associates are employees of the practice. I'm pretty sure that whilst practices can be bought and sold, there cannot be any 'goodwill' element in the sale price.