setting yourself up as limited company

kdowling

do revenue allow hospital consultant sets themselves up as limited companies for their private work?

Lockedout2

Doctors and dentists have a legal impediment to carrying on the trade through a limited company.

Peregrinus

Yup, a limited company can't get a medical licence or practice medicine.

That's not to say that there could be no space for a limited company in connection with a medical practice. For example, a consultant could form a limited company to acquire a building, and then he could rent the building from the limited company as a place of business for his medical practice. Or he could have a limted company which provides medical plant/equipment employed in the practice. Etc, etc.

But the actual medical practice, no. He has to carry that on as his own trade or profession.

kdowling

i know of locum pharmacists that got into trouble with revenue when they set up a limited company as revenue said they should be PAYE with each employer or agency and made them pay back correct tax with interest.

just wondering how revenue would view limited company for consultants

relax carry on

Bit of reading around Revenue's opinon of doctors incorporating.

https://www.irishtimes.com/business/health-pharma/analysis-no-clean-bill-of-health-for-medical-consultants-in-revenue-tax-probe-1.2316455

https://www.irishtimes.com/business/economy/revenue-collects-61m-from-medical-consultants-tax-investigation-1.3104190

Peregrinus

kdowling wrote: »

i know of locum pharmacists that got into trouble with revenue when they set up a limited company as revenue said they should be PAYE with each employer or agency and made them pay back correct tax with interest.

just wondering how revenue would view limited company for consultants

I think a bigger issue is how the medical council would view it, to be honest. A limited company cannot be registered as a medical practitioner, and therefore cannot practice medicine or charge patients for medical services.

What you can do is set up a service company. It works like this:

Mr. Consultant sets up a company, XYZ Limited. XYZ Ltd acquires premises and leases them to Mr. Consultant as his consulting rooms. It acquires medical equipment and leases that; medical supplies and sells them. It employs a receptionist and provides reception services on a contractual basis to Mr. Consultant for use in his medical practice.

Patients who attend the practice have a contractual relationship with Mr. Consultant, who carries on the practice. He invoices them and they pay him. If he has a salary, fees or whatever from the state as a consultant, that goes to him as well.

Mr. Consultant makes substantial payments to XYX ltd by way of rent on the premises and equipment, payment for medical supplies, provision of reception services, etc, etc. He claims these as a deduction in calculating the profits of his profession.

This is all perfectly legit, provided the amounts paid to XYZ ltd represent the market rate for the services it provides, and the whole thing isn't a device to evade tax by inflating the deductions that Mr. Consultant can claim. (Which is what the Revenue will focus on.)

As far as the patients and the employing hospital are concerned, it's irrelevant. Their relationship is with Mr. Consultant, and they pay him. They neither know nor care whether he has a service company, or what is relationship with the service company is, or what payments he makes to the service company.

dbran

There would be the professional service surcharge provisions to consider which would almost certainly apply to any profits of the service company. But I have seen it used for setting up company pensions for use by the practicioner.

dbran

Peregrinus

dbran wrote: »

There would be the professional service surcharge provisions to consider which would almost certainly apply to any profits of the service company. But I have seen it used for setting up company pensions for use by the practicioner.

dbran

Yes. I'm not saying there's any tax or other advantage to be got from doing this. That would depend on the individual's circumstances, and what outcome he was trying to acheive. All I'm saying is that, although he can't conduct his medical practice through a limited company, there is a possible role for a limited company in connection with his medical practice.

Heisenburg81

Peregrinus wrote: »

I think a bigger issue is how the medical council would view it, to be honest. A limited company cannot be registered as a medical practitioner, and therefore cannot practice medicine or charge patients for medical services.

What you can do is set up a service company. It works like this:

Mr. Consultant sets up a company, XYZ Limited. XYZ Ltd acquires premises and leases them to Mr. Consultant as his consulting rooms. It acquires medical equipment and leases that; medical supplies and sells them. It employs a receptionist and provides reception services on a contractual basis to Mr. Consultant for use in his medical practice.

Patients who attend the practice have a contractual relationship with Mr. Consultant, who carries on the practice. He invoices them and they pay him. If he has a salary, fees or whatever from the state as a consultant, that goes to him as well.

Mr. Consultant makes substantial payments to XYX ltd by way of rent on the premises and equipment, payment for medical supplies, provision of reception services, etc, etc. He claims these as a deduction in calculating the profits of his profession.

This is all perfectly legit, provided the amounts paid to XYZ ltd represent the market rate for the services it provides, and the whole thing isn't a device to evade tax by inflating the deductions that Mr. Consultant can claim. (Which is what the Revenue will focus on.)

As far as the patients and the employing hospital are concerned, it's irrelevant. Their relationship is with Mr. Consultant, and they pay him. They neither know nor care whether he has a service company, or what is relationship with the service company is, or what payments he makes to the service company.

Where owning a freehold or freehold equivalent isn't an option, could the company rent the premises itself and then sublet to the consultant? I know 25% rate and possible surcharge but legally could be done? Surcharge could be avoided by loading up pension in any case.

Peregrinus

Heisenburg81 wrote: »

Where owning a freehold or freehold equivalent isn't an option, could the company rent the premises itself and then sublet to the consultant? I know 25% rate and possible surcharge but legally could be done? Surcharge could be avoided by loading up pension in any case.

Yes, it could be done. But if the company was charging more in rent than it was paying out in rent, the Revenue would wonder why the consultant was paying more than he apparently needs to in rent on the premises concerned. He'd need to have a good answer to that.

wally1990

Contracting plus accountants can set you up with a limited company for medical locums etc

Their site states

Contracting PLUS has extensive experience providing contracting tax solutions to Medical Locums, Hospital and GP Practices.

We have built a strong reputation in this sector by helping medical professionals maximise their take-home pay in a tax compliant manner and supporting them 24/7 to ensure that payments and taxation are as stress free as possible.

We offer two customised solutions to cater for different requirements in the sector.

1: Managed Solution

Facilitates both short term and long term medical locum.
Facilitates both full time and part time medical locum.
Immediate set up.
Competitive monthly fee.
Weekly and monthly payroll cycle.
Tax and company returns prepared and submitted on your behalf.
24/7 Access to your account via our online client portal.
Access to our free expense app for smart phone users.
2: One Man Limited Solution

Ideal for long-term locum

You own the Limited company.
Competitive start-up fee and competitive monthly fee.
Direct access to your accountant.
24/7 online access to your accounts.
Up to date access to your PAYE and VAT liability.
Retain earnings (pay yourself a wage during quiet months).
You can employ people through your limited company.
Regardless of the option you choose, you have access to the same premium level of resources and benefits we provide to all our contractors. These include:

A Limited company structure.
A Personal account manager to assist and advise you.
Easy to use online accounting system.
Continuous guidance with claiming tax deductible expenses.
Maximise your take-home pay while minimising administration.
Personal tax return completed with you.
Free pension and investment consultation through CWM.
The peace of mind of dealing with a Revenue Approved Provider.
Insurances: Please note you will need your own Medical Indemnity insurance – MPS or MDU if you are not covered under a HSE policy. Contracting PLUS will need a copy of your personal insurance.