Tax Treatment of General Medical Service (GMS) Scheme Payments to Medical Practitioners

January 31, 2024

Tax Treatment of General Medical Service (GMS) Scheme Payments to Medical Practitioners

The General Medical Service (GMS) Scheme is crucial in providing healthcare services to the public in Ireland. Under this scheme, medical practitioners such as General Practitioners (GPs) receive payments for their medical services to GMS patients. However, practitioners must understand the correct tax treatment of the income they receive under the GMS contract to ensure compliance with tax regulations. This blog post will explore the critical aspects of the tax treatment of GMS scheme payments to medical practitioners.

General Tax Treatment of GMS Income

GMS income received by medical practitioners is subject to income tax, just like any other income. Therefore, it is essential for GPs with GMS contracts (including employees) to declare this income in their tax returns accurately. It is worth noting that GMS income is treated as "earned income" for taxation purposes.

Employees of a GP practice who have received a salary and hold a GMS list are subject to tax on this GMS list as the contract is in their name despite not receiving the income. The withholding tax paid to the Revenue by the HSE is in the GMS contract holder's name. 

Joint Election and Professional Services Withholding Tax (PSWT) Credits

Section 1008A was introduced into Part 43 of the Taxes Consolidation Act (TCA) 1997 to clarify the tax treatment of GMS income for GPs operating in partnership. This provision allows for a joint election by the partners involved in the partnership so that only one GP can claim the tax credits. The joint election ensures that the PSWT credits, typically withheld by the Health Service Executive (HSE), are utilised efficiently. GPs operating in partnership should communicate and coordinate with each other to make this joint election optimise their tax liabilities. 

The below form should be filled in and signed by all GP partners

Treatment of business expenses

Under Schedule D, Case II (profession) of the TCA 1997, determining tax-deductible business expenses involves assessing whether the expenses are “wholly and exclusively” for the trade or profession's purpose. This principle applies to sole traders, partnerships, and companies. For sole traders like GPs, only expenses solely for their trade can be deducted, including costs for services under a GMS contract and other medical services. In partnerships, expenses solely for the partnership's business are deductible. If an expense benefits more than one trade, only the portion related to that trade is deductible. This rule also applies to companies, where expenses must be exclusively for the company's trade to be deductible. Additionally, under section 1008A(4) of the TCA 1997, expenses for earning specific income treated as that of a medical partnership are considered as incurred by the partnership itself. This detailed guidance ensures that business expenses are appropriately allocated and deducted for tax purposes, considering the specific nature of the trade or profession, whether it's a sole proprietorship, partnership, or a company.

Transitional Arrangements and Adjustments

Transitional arrangements have been implemented to help medical practitioners transition to the correct tax treatment of GMS income.

  • All GPs in partnership should complete and file the Medical Joint election form and file with the Revenue by 31.01.24
  • Employees with a GMS list from 2021-2023 should sign a mandate to request that the Revenue transfer the Withholding Tax to the partnership. This cannot be done from 01.01.24.
  • Practices with an employee holding a GMS list must find an alternative arrangement as from 01.01.24, this income is treated as the employee, and so is the withholding tax. Possible solutions:

-The employee gives up their GMS list to the partnership

- The employee becomes a partner, either a percentage partner or a fixed-income partner ( there are risks to this). 

-The employee is treated as self-employed for their GMS income and an employee for all other income.


This situation has landed on GPs who are overstretched and struggling to get adequate staff with little time to get everything in order. GPs who own a practice and have employees with a  GMS list or who are in partnership must file the election forms with the Revenue and devise a plan for the employees who hold a GMS list.

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