In Bruce Cawdron v HMRC [2019] TC07295 the FTT held payments to a GP were his remuneration and not compensation to his personal company for the time he spent working elsewhere.
Mr Cawdron was a GP.
- He was sole shareholder and director of Warehorne Consultants Limited which traded as the Martello Medical Practice (“the Practice”) and the sole GP practicing from the practice.
- In 2013 he took an appointment as a GP member of the South Kent Coast CCG Board.
- The contract was in his name as an individual.
- His fee payment for the role was made to the practice bank account with tax deducted at the basic rate plus NICs.
- Mr Cawdron did not declare the fees on his self assessment return and argued that the payments were compensation (for locum fees) for the time he spent out of the practice working for the CCG.
- HMRC said that it was with him as an individual and amended his return for higher rate tax on the fees as remuneration for services provided by him personally.
The FTT agreed that the fees were remuneration for Mr Cawdron’s services:
- Warehorne and therefore the practice were a separate entity to Mr Cawdron.
- The contract did not mention the company and its terms made it unlikely that it was with a company rather than an individual. Specifically, it also did not mention a locum.
- The fact that the payments were made to the company did not mean they were its income; this was Mr Cawdron’s choice and it did not change the nature of the payments.
Had Mr Cawdron wished to have this income taxable on the company the contract should have been with it and its terms should have been altered accordingly. This would have thrown up other issues as he would have been providing personal services via a limited company.
Links to our guides:
Personal service company (PSC) tax
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