Thinking about stepping into the world of private general practice? It's a fantastic way to tailor your medical service to meet patients’ needs more personally and professionally. But, as with all good things, running a private GP service comes with the responsibility of managing your own business finances, including taxes. So, what should you keep in mind?
As a private GP, you’ll wear multiple hats – one of which will be that of a business owner. This role comes with its own set of tax implications. Unlike NHS-employed GPs, private GPs need to consider various taxes, such as income tax, corporation tax (if you operate as a limited company), value-added tax (VAT), and potentially capital gains tax if you sell part of your business or its assets.
**Income Tax:** You’ll pay income tax on your earnings, depending on your tax bracket. It's crucial to maintain accurate records of your income and expenses throughout the year to ensure you only pay what you owe. Failing to report accurately can lead to penalties.
**Corporation Tax:** If you choose to set up your practice as a limited company, you'll be liable for corporation tax on your profits. Many private GPs opt for this route as it can be more tax-efficient compared to being a sole trader or a partnership.
Just like income tax, you'll also need to consider National Insurance Contributions (NICs). If you're self-employed, you'll pay Class 2 and Class 4 NICs, depending on your profits. Staying ahead of your contributions helps avoid any unexpected charges at the end of the tax year.
Keeping detailed and organised financial records is key. This means tracking income from patient consultations, additional services, and any medication dispensed. Utilising a reliable accounting system can make this part of the job less daunting. Platforms like Hero Health can integrate with EMIS Web to streamline patient billing and manage financial transactions, maximising efficiency and accuracy.
If your private GP practise’s turnover exceeds £85,000, you’ll need to consider registering for VAT. Many medical services are exempt, but you should seek professional advice to understand what applies to you.
The success lies in planning. Handling tax obligations isn’t just a number game - it ensures your practice is compliant and financially healthy.
Of course, navigating the financial landscape can seem daunting, especially if accounting isn’t a familiar field. Therefore, consulting with a tax professional who understands the GP landscape in the UK can save you time and potential headaches down the road. They can offer personalised advice and help you make tax-efficient choices.
Running a private practice offers an opportunity for greater professional freedom, but it requires careful financial planning. Understanding your tax responsibilities and exploring systems that facilitate efficient management, like EMIS Web and Hero Health, can enhance your practice's operational excellence. Taking these steps will not only keep the taxman happy but will also support the growth and stability of your private GP service.
Submit your question here and we'll get our experts to review
Keep up to date with the latest private general practice news, resources and systems.
Our 1-minute newsletter, delivered monthly
