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Newly qualified GP - tax return

Newly qualified GP - tax return

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I am helping a friend, who is a recently qualified GP, to complete his tax return for 2012-13.

He was employed by the NHS as a trainee doctor for the whole of the tax year and received his salary via PAYE. His training contract finished in 2013-14.

I think, but I am not sure, that the following expenses that he incurred should be deductible:

1. Subscription to the Medical Defence Union (simlar to a PI policy) that protects the doctor in the event of a medical negligence claim - part of this was reimbursed to him. The total subscription he paid was approx £1,100 and approx £400 was reimbursed. I assume the net cost to the doctor (i.e. around £700) will be deductible.

2. Exam fees - he had to pay 2 x approx.£1,500 (i.e. approx. £3,000) to take his exams (first time plus a resit). I understand that the cost of the exam fees will be deductible (I think both exams, which both took place and were paid for in the tax year 2012-13).

3. The cost of travelling by train from Harrogate (where he lives) to London (where he had to go to sit the exams) and overnight stays in a hotel in London in connection with the above exams - I think these costs should also be deductible.

4. Annual subscriptions to the RCGP (Royal College of General Practitioners) and GMC (General Medical Council) - I believe these are also deductible expenses.

If anyone is able to confirm that these expenses are, in fact, deductible, please let me know.

Many thanks.

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23rd Jan 2014 13:58

Newly qualified GP

In brief answer to your questions:

PII will be deductible if he paid them himselfGenerally learning a new trade or profession is not deductible against your income however there has been a relatively recent case (HMRC v Banerjee) where the court allow training expenses in certain circumstances under ITEPA2003 s. 336. There is a good article written by Keith Gordon about this in Tax Adviser 2009. If you google it you may find it. I believe KG looks at AccountingWeb so perhaps he can give you more information.Same as above (2)Annual subs will be deductible - both organisations are on the HMRC subscription list here: http://www.hmrc.gov.uk/list3/

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23rd Jan 2014 16:39

Many thanks, ccaspell.

Just to clarify, presumably, your answer to Q1 means that the net cost to the doctor is deductible (i.e. to the extent that he paid them himself).

I am aware of the case you mentioned (HMRC v Banerjee) but I am not sure of the "certain circumstances" and whether the cost of the exam resit should also be deductible. I believe that under the terms of his training contract, he is obliged to continue attempting to pass the exams until successful, so I think it is "Wholly, necessarily and exclusively" incurred for the purpose of his employment, and therefore should be deuctible under the general rules for Schedule E.

 

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23rd Jan 2014 19:16

To clarify

1. Yes the net cost to the doctor.

2. I am afraid I can't help you much more on the Banajee case. ITEPA2003 s.336 deals with the deduction of employee's expenses and says the following:

The general rule is that a deduction from earnings is allowed for an amount if—(a) the employee is obliged to incur and pay it as holder of the employment, and(b) the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment. So if your friend can demonstrate the two points sufficiently then s336 should apply. Do beware though that it is not always straight forward proving point (b). I would suggest that you dig a bit into the Banajee case and if you think enough of the points from the case fit your friend have a go and make the claim.

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24th Jan 2014 15:01

Thanks again, ccaspell.

I have looked again at the Banerjee case details and it seems to me that the key point is whether or not sitting the GP exams is an intrinsic part of the trainee doctor's training contract of employment. He feels strongly that it is and, I must say, I tend to agree with him.

I think we will go ahead and make the claim and see if HMRC decide to challenge it in the light of the Banerjee case.

Many thanks again.

 

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By krnl
to lionofludesch
28th Jan 2015 23:57

With reference to 1) above could I check a similar scenario please.

A doctor pays £5100 per year for professional indemnity. This comprises:

£4000 to cover work undertaken by employer 1 as an NHS employee.

£1000 to cover work undertaken when self employed.

£100 is the credit fee applied by the PII company to cover payment by monthly instalments.

Employer 1 pays the doctor 'PII reimbursement' of £4000 per year across 12 months PAYE. This payment is lumped in with salary and is taxed each month.

How much of the £5100 is it possible to include on the tax return as an allowable expense?

Many thanks indeed.

krnl

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