Online Accountants for healthcare professionals

The simple answer is yes. Here at dns accountants, we can advise you on incorporating your GP practice. If you have a GP practice that has GMS, PMS or APMS contracts, you are able to incorporate. GP incorporations have become a more common trading models for GP practices in recent years. However, you should consider both the benefits and pitfalls before you abandon a traditional partnership model.

There are potential benefits of being incorporated including tax benefits but there may be other potential disadvantages or pitfalls you need to consider. You need to consider compliance, tax, legal and accounting pitfalls before you incorporate an NHS practice.

The benefits of incorporation for medical practices

There are a number of benefits if you incorporate your practice. These include:

Tax - You will pay less tax than a partnership or sole trader, as the corporation tax rate for limited companies is between 19-25%. However, you will need to consider other taxes as well, so it's worth talking to a specialist tax adviser.

Paying yourself - There are advantages with a limited company to pay yourself via salary and dividends that can be more tax efficient. However, over recent years the tax advantages of this have decreased a littel as the government have raised dividend tax rates. Again speak to a specialist medical accountant for advice.

Pensions - Directors of limited companies can pay money directly into pensions and these can be made prior to paying corporation tax, making them highly tax efficient. This is an opportunity to reduce your corporation tax bill for the company. However, we strongly recommend getting pension advice prior to taking any action.

Personal liability - Shareholders of a limited company have limited or no personal liability other than an obligation to pay any unpaid amounts due on their shares. In a partnership or as a sole trader you are personally liable for any debts or negligence or debts. This personal liability can put your own assets at risk when trading as a sole trader or partnership.

The disadvantages of incorporation for medical practices

A limited company must file accounts with Companies House and complete Corporation Tax returns, so there is added compliance work and cost with a limited company.

Statutory registers of shareholders, regular board meetings and filing of confirmation statements also need to be undertaken, again adding to the compliance burden of a limited company.

Some CCGs allow contracts to be awarded to limited companies, where they are owned by medical professionals, others will only contract to sole traders and partnerships.

NHS superannuation is based on salaries and dividends for each GP partner. So, you'll need to consider the effect of tax planning on these contributions and pensions overall.

Profit sharing may be harder with a limited company, than with a partnership.

A company is a separate legal entity, and so consent from NHS England is required to transfer a GMS contract from the partnership to the company.

Seek specialist medical accountants advice before making any decisions to incorporate as your practices specific circumstances will need to be considered.