Tax and Doctors

14th Jan 2010

Enquiries - commissions

HMRC has recently published confirmation that it is attempting to identify cases for enquiry where commissions may have been omitted from Tax Returns. As a first stage in this process they have already requested information from institutions such as BUPA and Sun Life. As a second stage they have just announced a “Tax Health Plan”.
 
Tax Health Plan – First deadline 31st March 2010
 
HM Revenue & Customs is offering an opportunity for medical professionals with undisclosed tax liabilities to make a voluntary disclosure of unpaid tax with a guaranteed penalty of only 10%.  This is a kind of ‘amnesty’. If you would like further information regarding this please let us know. The deadline for informing HMRC if you wish to make a disclosure under this plan is 31 March 2010, and the actual disclosure must be made by30 June 2010.
 
Enquiries – other issues
 
In addition, HM Revenue & Customs continue to have a particular interest in making enquiries regarding:-
 
·         Motor and travel expense claims
·         Status (i.e. whether any self employment is “real”, or should be treated as an “employment”)
 
Training
 
A court case relating to training expenses incurred by a registrar has found in favour of the taxpayer.
 
The taxpayer claimed tax relief for training courses plus the related travel and accommodation costs. HMRC attempted to disallow these costs on the basis that they were not “required” by the duties of her employment.
 
However, the taxpayer appealed and both the General Commissioners and the High Court have held that the training costs were correctly tax deductible.
 
The following facts were relevant in arriving at the decision:-
 
·         The terms and conditions of employment included a training clause which required the taxpayer to continue to hold a training number.
·         The taxpayer was required to attend meetings, courses and conferences “in carrying out the duties of her employment”
·         HMRC acknowledged that attendance by the taxpayer on the training courses was compulsory.
·         If she had not undertaken the training, her employment would have been terminated.
 
There are some important lessons to be learned from this case. If paperwork is in place requiring training as part of the duties of employment, this increases the chance of HMRC allowing tax relief.
 
Training must be incurred in the actual performance of your duties and not to put you in a position to perform your duties. It also must have no other purpose. So, when you undertake training, you must be performing the duties of your employment just as much as when you attend patients in hospital wards.
 
This may be a good opportunity to review your contract of employment and consider whether any amendments may be appropriate.

Author: Emma Glover (emma.glover@rowlandsaccountants.co.uk)

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