BIM54015 - Doctors and dentists: receipts: cremation fees paid direct to charities

Before a deceased person can be cremated, two certificates stating the cause of death have to be signed, one by the doctor who attended the deceased before death, and the other by a doctor of at least five years' standing. Normally the undertaker arranges for the certificates to be signed and pays a fee (often known as `ash cash') to the two doctors. The amount of the fee is then included in the charge which the undertaker makes to the deceased person's estate.

Doctors entitled to such fees often arrange for them to be paid to medical charities. After representations from the British Medical Association, the Inland Revenue told the Association that it had no objection to their making a statement in the following terms:-

The Inland Revenue has confirmed that:

• Doctors assessed to tax under Schedule D Case II (that is, mainly GPs) will be assessable on their cremation fees. This is because they are carrying on a profession and the rules for computing their profits lay down that all fees earned must be brought into account, even if some of these are not received by them because they have arranged for the payers to remit the amounts due direct to medical charities. The Inland Revenue has confirmed that there is no room for any concession on this point.
• Doctors who are not assessed under Schedule D Case II will fall to be assessed on any fees arising to them under Case VI of Schedule D. Income Tax under Case VI is computed on the full amount of the profits or gains arising and a profit is not regarded as arising until it is received. The Inland Revenue has confirmed that it will regard fees assigned in advance and which are paid direct to a medical charity as not having been received and will therefore ignore them in computing the Case VI profits. Accordingly, so long as these conditions have been fulfilled, any doctor who has been assessed within the last six years on such fees should write to his Tax Office enclosing a copy of this statement, enquiring whether he or she is entitled to relief under TMA70/S33. The Inspector is likely to require evidence that the fees were assigned in advance and were paid direct to a medical charity.

This statement has been published in the British Medical Journal.

Business Tax (Technical) should be consulted before it is accepted that medical fees are not assessable in other circumstances.