Colm Burke (Cork North Central, Fine Gael) | Oireachtas source

A large number of GPs have contacted me on this issue and I have met some of them. What normally happens with GPs in the general medical scheme, GMS, who are in a partnership practice is that the money comes into the practice, it is lodged into the practice account and GPs pay tax on the basis of the salary drawn from the practice. That is under strict guidance of the accountancy practice which has been in place for a long number of years. My understanding is that Revenue has decided that for any GP in the GMS, the income they get under the scheme will be taxed and they will be treated as individuals rather than being members of a practice. This is causing serious problems.

Some GPs aged over 60 have indicated that they do not want this new process in place and are planning to take early retirement. We already have a challenge in getting GPs in many rural areas. Those who are retiring are not being replaced. This is now a disincentive for people to stay in the GMS. Some will withdraw from the GMS or possibly retire as GPs completely. One GP who is in a partnership involving two people summed it up for me. He does 70% of the work on the GMS. Therefore, 70% of the income that comes in for him is under the GMS. His partner only does about 30% under the GMS and the remaining 70% of the work that person does is through private practice. Therefore, he will now get a larger tax liability because of the new Revenue system compared with his partner. This system will not work.

We need to remember that money that comes in under the GMS goes towards running practices and paying salaries. It also covers some of the enormous costs in practices, such as building insurance, professional indemnity insurance, heating, lighting and all of the things that are needed in a practice. All the money that comes in under the GMS goes into a central account. That account is used to pay the expenses of the practice as well as paying the salaries.

I am calling for engagement with the Revenue Commissioners in dealing with this. I understand this may require a change in the one of the Tax Acts in order to accommodate Revenue's concerns. I believe that this needs to be done immediately. GPs are really concerned. The accountancy bodies have identified that up to 91% of GPs will be affected directly as a result of this decision. Those 91% of GPs are in some kind of a partnership where there is a clear set of rules as regards the payment of salaries and also, as a result, the payment of tax. This will now be totally changed and they are not in a position to be able to work under this particular change.

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