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Medical or dental practitioners are chargeable to income tax in respect of the profits of their practice, which may include both private paying patients and National Health Service patients, as income from their profession or vocation. However, most hospital appointments under the National Health Service are chargeable to income tax as employment income under ITEPA 2003. See further E4.233. It is common for doctors and dentists with an NHS contract of employment also to receive fees taxable as income from their profession or vocation. These may be for private patient work where a proportion of fees is paid to the hospital for use of equipment, facilities and staff¹.

For HMRC internal guidance on computing trading profits see BIM54000 onwards.

Some professional people who practise alone or in partnership, in particular medical professionals, take out insurance policies to indemnify themselves against the cost of engaging a locum, or against other practice expenses, in the event of illness or incapacity. HMRC accepts that premiums on such policies are deductible in computing the profits of the profession and the benefits