This site is intended for health professionals only

At the heart of general practice since 1960

Read the latest issue online

CAMHS won't see you now

The dangers of OOH services without GPs

By Ian Cameron

Medical accountants are warning that a row between Government departments over tax relief for GPs' pension con- tributions could result in practices missing the deadline to submit tax returns.

Missing the 31 January deadline would make GPs liable for a £100 fine, but also put them at greater risk of investigation by tax inspectors, accountants said.

The Department of Health and HM Revenue and Customs are at odds over how increased pension contributions in GPs' global sums are treated for tax purposes.

The row centres on whether the 14 per cent employer's contribution for GPs' pensions, included in global sums since the new contract, can be offset against tax. Tax relief on the contribution would amount to £5,166 for a GP with superannuable profits of £90,000 a year.

A letter from the Revenue to one accountant said agreement was unlikely before the deadline but they should go ahead and claim the tax relief on GPs' pension contributions through self-assessment returns.

But accountants warned GPs could face extra accounting costs if they claimed the relief only to find the Government taking a different line after they had submitted their accounts.

Paul Kendall, a partner with Cumbria-based Dodd & Co, said he expected to have to ask Revenue and Customs for an extension to the deadline for submitting returns. 'We are holding back as long as we can,' he said.

Lizzy Lloyd, a partner at Col-chester-based Hubbard Lloyd, who received the letter from the Nottingham branch of Revenue and Customs, said it was a 'positive step' that at least one area had said relief could be claimed. She said: 'As far as I'm concerned we have no choice but to prepare tax returns on that basis.'

Bob Senior, deputy chair of the Association of Independent Specialist Medical Accountants, said GPs would have to bear the cost if the rules changed.

But Dr Andrew Dearden, chair of the BMA's pensions committee, said he would claim the money back from the Government if it decided not to give relief on pension contributions.

Rate this article 

Click to rate

  • 1 star out of 5
  • 2 stars out of 5
  • 3 stars out of 5
  • 4 stars out of 5
  • 5 stars out of 5

0 out of 5 stars

Have your say