Gerald Nash (Louth, Labour)
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120. To ask the Minister for Finance if he is aware of a change of approach by the Revenue Commissioners to the tax affairs of general practitioners who hold general medical services contracts with the HSE, specifically those who operate within a partnership structure, as is common practice (details supplied); his views on whether the position should be reconsidered, as outlined in the correspondence provided; and if he will make a statement on the matter. [43916/23]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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124. To ask the Minister for Finance if he can detail the consultations his Department has had with GP representative groups regarding proposed changes to the tax treatment of GMS income, specifically the proposal to have this income declared as income by individual GPs who at present are in partnerships or have such income mandated to employers; if he can detail any research on the possible impact of this proposal in terms of tax revenue and impact on GP partnerships; and if he will make a statement on the matter. [43975/23]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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125. To ask the Minister for Finance if his Department has a proposal to change the tax treatment of GP partnerships and their income from the GMS scheme; and if he will make a statement on the matter. [43976/23]

Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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135. To ask the Minister for Finance whether there is any legislative basis to the change proposed by the Revenue Commissioners on the way it treats the income GPs receive as payment for GMS/medical card services on 1 January 2024; if he can identify the basis and reason for such change; and if he will make a statement on the matter. [44044/23]

David Cullinane (Waterford, Sinn Fein)
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138. To ask the Minister for Finance the reason Revenue Commissioners are changing their approach to reckoning general medical services income being attributed to partnerships or employers, meaning that any such GMS income will need to be declared as income by the individual GMS list holder in their tax return from January 2024; and if he will make a statement on the matter. [44077/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 114, 120, 124, 125, 135 and 138 together.

My Department and Revenue have, for some time, been aware of issues involving contractual arrangements which, in certain circumstances, has led to uncertainty within the General Practitioner (GP) community in relation to the tax treatment of General Medical Services (GMS) scheme income.

Revenue issued guidance to tax practitioners through the Tax Administration Liaison Committee in July of this year, which indicated that there would be a six-month transitional period for compliance with existing tax law, until 1 January 2024. However, Revenue are working to clarify the issues and hope to soon be in a position to publish supplementary guidance on this matter. Although this guidance is being widely reported as a proposed tax change, I would note that it does not, in fact, introduce a change to tax treatment of GPs. Instead, it simply clarifies the existing legal and administrative position.

In accordance with Section 58C of the Health Act, a GMS contract is between the HSE and an individual GP. 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.

However, in some instances where an individual GP is an employee of a medical practice, the individual GP may agree, as part of their contract of employment with the practice, to assign their individual GMS income to the bank account of the medical practice and receive a salary or wages from the practice, as agreed within their employment contract.

In some other cases, where an individual GP is a partner in a medical practice, the GP may mandate that the GMS payments are made to the partnership rather than treating it as their own income, instead receiving a share of the partnership profits in line with their relevant partnership agreement.

Regardless of such arrangements, due to the nature of the contract between the HSE and the individual GP, under tax law, the GP who entered the contract with the HSE is chargeable person, or the ‘specified person’ in respect of Professional Services Withholding Tax (PSWT). In practice, what this means is that, even though their GMS income may have been paid into the medical practice’s bank account, relevant GPs who are currently employed and taxed under the PAYE system as employees or partners of the medical practice are required to make a return under the self-assessment system in respect of their GMS income. They are also able to make claims for the PSWT tax credit.

A determination by the Tax Appeals Commission in 2022 confirmed the legal position that GMS income is the income of the individual GP who has entered into the GMS contract. There is, therefore, no legal basis for Revenue to set aside a contract that has been entered into between a GP and the HSE so as to treat income belonging to an individual GP as income of another person or medical practice for tax purposes.

In an effort to find a solution to this issue, discussions have taken place between officials from my Department, Revenue, the HSE and the Department of Health. Furthermore, 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.

My Department has not undertaken consultations with GPs on this issue, however, as previously indicated, Revenue have been advised on the matter by tax practitioners through the Tax Administration Liaison Committee. Although my Department and Revenue are conscious of the difficulties being experienced by GP practices, they must be cognisant of existing legislation. The approach being taken is intended to ensure that the tax treatment of GMS income reflects the contractual position. It is not related to any possible impact on tax revenue.

Given the core issue concerns the contractual arrangements involving GPs, there may be scope for the Department of Health and the HSE to examine the issue from a contractual viewpoint.

As Revenue are statutorily independent in the administration and operation of the tax code, the Deputies will appreciate that it would not be appropriate for me to request Revenue to make changes regarding this matter.

As it currently stands, the relevant tax policy and legislation remain unchanged, however, to assist GPs and medical practices in complying with their obligations under existing tax law, Revenue are allowing a transitional period to 1 January 2024 and are preparing further guidance to clarify the tax treatment of GMS income.