I have an accountant client who has a medical consultant as a client. HMRC have written to the accountant saying that the company cannot operate the doctor's profession, that there is no commercial or business motivation for incorporation as incorporation does not protect the doctor from risk - he remains personally liable -and thus they propose to tax the doctor on the profits of the business personally - ignoring the existence of the company for tax purposes.
We all understand the arguments that a medical consultant does not have transferable goodwill on incorporation but this is not the issue here. Essentially, HMRC just propose to ignore the existence of the company even if contracts are between the company and the patient/hospital etc. There are a fair number of incorporated individual locum doctors and medical consultants and I was wondering if anyone else has seen a similar letter? The Inspector does say HMRC are going to ensure that other doctors are treated the same way, that they are looking for a test case and that they will be publicising their views on this soon.
My email address is below if anyone would prefer to email me rather than post details here.