By Simon Misiewicz
Article relevant to the tax year 2017/18
Are you a GP with a Practice, looking to make more money for your medical business – but unsure how to do so?
I was chatting to a GP investor client late last night, and some of the points raised from that consultation are worth highlighting here for our GP, dentist, and doctor clients for their medical professional businesses.
One of the main concern many of my GP investment clients express is how to make more money from their private Practice, especially in light of some of the ongoing financial restrictions imposed by the NHS.
Our team of medical professional accountants are focused on creating greater revenues for your medical professional business such as GPs, locums and dentists, whilst being tax-efficient.
I was discussing various wealth management and tax planning measures we could utilise for his private Practice, and my GP client outlined an example he’d seen recently from a Practice on the South coast.
According to my GP client, two doctors in Bournemouth set up a private clinic inside their surgery, to offer patients faster appointments, costing an additional £145 per patient. This allowed these patients to jump the NHS queue, and to be seen the same day, and including Saturday appointments, giving them a reduced waiting time of up to four weeks in some cases.
These select patients were also offered longer consultations of up to 40 minutes, as well as x-rays, physiotherapy and vaccinations. These services were only available to patients not registered at the NHS surgery. Under the terms set out in their contracts family doctors aren’t allowed to offer private services to their own NHS patients. This would create a clear and obvious conflict of interests for existing patients.
The doctors are allowed to do private work, but only on patients registered at another Practice. Patients can alternatively queue up outside from 8am for the walk-in clinic.
The scheme is representative of GPs who are frustrated at not being able to provide adequate care levels to their growing patient lists, but also to their need to make more money for their private Practices.
Surgeries are also, according to my GP client, facing a recruitment crisis with rising numbers of unhappy doctors retiring in their 50s and not being replaced by younger trainees across Practices in the UK as we discussed in another article with the NHS creating a Retention Scheme to keep doctors Woking with their patients.
The doctors at the Bournemouth Practice had claimed that the private clinic was the only way they could guarantee treating elderly patients and to offer alternative and extra appointments. Another concern according to my GP client was that the private clinic was another way to ensure the financial survival of the Practice, in light of funding cuts from the NHS which were putting increasing pressure on the business.
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By now you would have noticed that the number of tax changes means that you need to plan for the future to ensure that you keep more of what you earn.
Property investors: How does Section 24 (mortgage interest relief) affect you? How are your properties going to perform once Section 24 (mortgage interest relief) comes into full effect?
Doctors/Dentists: Have you incorporated your private practice work into a limited company? Have you structured it to ensure that you and your family takes advantage of the tax breaks?
Stephen Covey said that “people climb to the top of the ladder, only to find out that it is set against the wrong wall”.
Many people go about their business and at the end of the year they feel that they have not moved forwards.
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Whilst I’m not advocating that GP clients should be mixing a variety of NHS-based and private appointments to protect their Practices in 2018, it’s important to acknowledge that many Practices are struggling to remain profitable whilst also delivering a satisfactory level of care to their patients.
There’s no one-size-fits-all answer, but the innovation of the Bournemouth Practice will certainly deliver more revenue for the two GPs brave enough to step outside of the traditional NHS-based framework.
The critical question of whether doctors are making enough money from their Practices will remain a pertinent one moving into next year – and I suspect my GP clients will continue to require further assistance on their tax-efficiency and wealth planning measures to protect their Practices in future.
I discussed in our other article how doctors can make more money from their practice via private work. It is interesting the insights that we pulled abut the hourly rate that NHS doctors earn compared to private medical professionals.
I have written other articles around tax and wealth generation for GPs that will be useful, including:
To learn more about our accountancy and tax services that will help you make more money and pay less tax in your medical profession, please book a time with us at a time that is convenient for you. All you need to do is use the below calendar and answer a few basic questions.