h&h Accountants Ltd
h&h Accountants Ltd
16-17 Hammet Street Taunton
Somerset TA1 1RZ
T  01823 325610 F 01823 325611
E  more@handhaccountants.com		 h&h Accountants Ltd
Horton House, 8 Ditton Street, Ilminster Somerset TA19 0BQ
T & F  01460 52666
E  more@handhaccountants.com
home payroll book keeping VAT accounts tax planning enquiry protection other services contact

Back to News Items
 TAX CASE: DOCTOR IS SELF-EMPLOYED

The taxpayer, Ian Mitchell, was a cardiac surgeon employed by the NHS, but also having his own private practice. When performing private operations, he usually asked Dr B to assist him. Dr B was a registrar employed by the same NHS trust as the taxpayer and worked closely with him there.

The patient, or his insurance company, usually received three bills for a private operation: one from the taxpayer, one from the anaesthetist and one from the hospital. The taxpayer paid Dr B a fixed fee for each operation, once he had received his fee from the insurance company. If Dr B was unable to assist, the taxpayer found a substitute doctor of his own choosing.

The taxpayer and Dr B entered into a ‘self-employed contract for services’, under which Dr B was not entitled to sick pay, travel expenses or paid holiday. Nor was there any commitment by the taxpayer that he would use only Dr B as an assistant, or by Dr B that he would only assist the taxpayer. HMRC regarded Dr B as the taxpayer’s employee. The taxpayer appealed.

Referring to Queen’s Bench Decision in Ready Mixed Concrete (South East) Ltd v Minster of Pensions and National Insurance [1968] 1 All ER 433, the First-tier Tribunal looked at the tests used by the judge in that case to determine whether or not someone was employed.

With regard to control, the tribunal said this test was of limited use in the instant case. The taxpayer was in control of the whole operation, but each member of the team, including Dr B, was highly trained and performed his task with little input from the taxpayer.

With regard to determining the time, place and nature of the operation, these were decided by the availability of private hospitals, theatre staff and the patient’s condition. As to mutuality of obligation, there was no obligation on the part of the taxpayer to provide work for Dr B.

Turning to right of substitution, the contract allowed for Dr B to do this, but in reality he accepted that he had never exercised that right. Looking at the test as to whether Dr B was in business on his own account, the tribunal found that the fact there was only one engager indicated employment, but the ad hoc nature of engagements pointed towards self employment.

Finally, the tribunal looked at the picture as a whole. It decided that none of the usual tests for employment were conclusive. However, it said that the limited and ad hoc nature of employments, the fixed price paid per operation, and the highly skilled services supplied by Dr B indicated a contract for services rather than one of employment.

Furthermore, the fact that both parties intended Dr B to be self-employed should in this ‘borderline case’ be taken into account. The tribunal decided Dr B was self-employed and allowed the taxpayer’s appeal.

For advice on YOUR BUSINESS RECORDS situation, and how to keep proper records, contact us Here


Back to the Top

Back to News Items

 

 

H and H Accountants limited. Registered in England No. 3058429.  16 Hammet St. Taunton TA1 1RZ.   Website and content © 2012

The material included on this website is for the general interest of our clients and business contacts. It is intended as a guide only and provides an overview of regulations in force at the time of publication. No action should be taken without seeking professional and specific advice and therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material published on this website can be accepted by the author or the firm.