I act for a number of hospital doctors who, in addition to their employment earnings have self-employed income from private practice, lectures etc. Many of the doctors ask the patient or drug company to pay their fee direct to a hospital charity or hospital research fund as opposed to them. This then benefits the hospital or other departmental staff. My concern is that as a self-employed doctor my clients' will still be required to include this income in their annual accounts despite it not being received by them personally. This means they are then liable to 40% tax on income which was never received. Has anyone got any thoughts on this situation or past experience with the Revenue? Can it be argued that as employed individuals can assign income without incurring a tax charge why should the position differ because the individual is self-employed?
Jason
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Giving to charity!
What the fuss. Always give under a Gift Aid as any individual taxpayer would. Your payment will be treated as paid out of your taxed income and charity reclaims the basic rate of tax by grossing the gift appropriately.
If you are a higher rate taxpayer, then you get the tax relief at your top marginal rate by extending the basic rate threshold. Simply enter the amount on Self Assessment Form.
You don't need any formal deed of covenants. You need to make a declaration to the charity but this can be oral or the charity can give you their own form.
As simple as that. Thanks to New Labour.
Jay Tanna
What's mine is yours
Boiled down to its basics this is the difference between form and substance.
You seem to accept that the doctor has earned income. If so then it is taxable notwithstanding that he/she might ask the source of the income to pay it to some other party.
On the other hand if the doctor makes it plain that he/she is performing the service for free and the recipient, out of gratitude, makes a purely free donation to a hospital charity of his/her choice then the two acts are mutually exclusive.
Income taxed under schedule D and schedule E are subject to separate laws except where D income is deemed to be E income (eg paid under agency conditions and IR35).
I am sure plenty of Schedule E workers would want to argue for a more liberal expenses regime on the grounds that schedule D workers get away with murder but that logic will not prevail.
Doctors private patients
I can see this that this thread is over 10 years old, but I have an HMRC enquiry based exactly on what Jason is asking, and not exactly sure how to deal with it yet. The private patient money from a few doctors goes directly into a charitable trust, which pays for a research student and going to seminars.
The Gift Aid idea of Jay Tanna doesnt work (if you add self employed income of £10,000, and charity payments of £10,000, the tax goes up)
If I can't argue that it's just not his income, I'm thinking of admitting a self employment, and treating the payments as wholly and exclusive payments for the self employment, making a profit of nil.
So does anybody have experience of the best way of dealing with it ?
All suggestions welcome.