Tax proposal 'will force GPs to retire or withdraw' from General Medical Card Scheme

A spokesperson for the Irish Medical Organisation said that Revenue's plan would negatively impact patients.

Plans to change how medical card income is taxed will drive doctors from the scheme, it has been warned.

GPs practicing under the General Medical Card Scheme (GMS) often lodge money from it and from private patients into a partnership bank account of the practice which can cover costs of running including lighting, heating, insurance, and staff costs. The doctors themselves then will take an annual salary and are taxed from the salary they receive from the practice.

However, Revenue issued guidance to tax practitioners through the Tax Administration Liaison Committee in July of this year, that proposes treating income under the GMS as individual income and GPs will be taxed accordingly.

Fine Gael member of the Oireachtas Health Committee Colm Burke said this needs to be changed. 

This is not acceptable and will force GPs to retire or withdraw from the scheme. There is now an urgent need for both ministers to resolve this issue. 

"There is a need for the Department of Health and HSE to correspond with Revenue and advise it is acceptable for a GP to treat income under the GMS as partnership income.

“There is also an urgent need for the ministers to amend the Taxes Consolidation Act 1997 which would give effect to the allocation of GMS income between partners within a partnership. This issue needs to be resolved at the earliest possible date as many GPs have already indicated that they intend to retire or resign from the GMS.

“The ministers need to issue an urgent statement to reassure GPs this issue will be resolved and individual GPs will not be taxed unfairly.”

In response to a number of parliamentary questions on the issue last month, Finance Minister Michael McGrath said that a GMS contract is “between the HSE and an individual GP”.

What's your view on this issue?

You can tell us here

“My department and Revenue understand that, as such, the HSE does not enter into GMS contracts with a medical practice, whether the practice is structured as a partnership or a company.

“It would not be appropriate to make changes to tax legislation to accommodate contracts and practices of a particular sector of the economy where they can be changed by agreement of the participants.”

A spokesperson for the Irish Medical Organisation (IMO) said Revenue’s plan would negatively impact patients.

"The IMO continues to engage with the Department and HSE to find a workable solution that reflects the model which has evolved in General Practice over recent years, that being the coming together of GPs in partnership arrangements to deliver patient care. 

"The very significant changes proposed by Revenue Commissioners would not support that model of General Practice and would have significant implications and challenges for GPs which would negatively impact on the delivery of care."