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Topical issues to consider for GP partnership clients

Author: Sally Sidaway (FCCA), Medical Director, Morris Crocker Chartered Accountants

Published: 15 Feb 2023

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I am not sure that we have ever been in more turbulent times in Primary Care General Practice and our role in helping practices to weather the storm has never been more important than it is now.

Although by no means an exhaustive list. I thought it might be useful to consider the areas that we might want to be discussing with our clients as we go into the new financial season.

Change of basis period

This looms and planning for the effect of a change of year end for many practices needs to be considered. Differing overlap levels for partners is something vital to explain and with this the effects of this change on the superannuation position also. We have now learned that NHSBSA will align the change of basis period with taxation rules and that the 5 year spreading will apply to superannuation in the same way as taxation. Care will be needed in preparing the ‘estimates of pensionable profit for2023/2024 and clients will need to be advised on position should they retire within the 5-year spreading period.

PCN companies

Some PCNs have established companies which sit alongside their networks, to employ the ARRS staff and carry out other functions of the network. They may or may not hold assets on trust for their member practices, but in our view the same public authority exemption would apply to them.

Cash flow and budgeting

At times when profits for many will be reducing, coupled for some with still large tax and superannuation bills to cover, the need for cash flow planning has never been more important. Clients need to understand the importance of this as we move forward, and we can provide valuable help in setting up robust budgeting and cash flow tools.

Remember however that the key is for the client to be very involved in the budget process and to then use for budget to actual comparisons. Different drawings models may need to be considered within this advice with, in my opinion the need to move away from the dividing up the month end pot mentality that is no longer for most a sensible course of action. Beware in particular the large superannuation balances that are due at the year-end for many this year and of course may or may not be collected efficiently and as expected by PCSE. Don’t lose sight of earlier years superannuation adjustments still not properly taken that could materially affect cash flow.


As you will be well aware this can remain a problematic area effecting our clients in terms of receipt and collection of monies. Be careful to help guide clients in obvious areas that may be adding to problems such as the performers list being fully up to date for leavers and joiners. There may be a need for earlier years Annual Certificates of pensionable profits to be resubmitted with a complaint to try to kick start action and Salaried GP’s may need to be reminded by the practice that failure to submit or inaccurate Type 2 certificates may be the problem. BUT – be careful not to promise a service that can sort out all PCSE issues for the practice as sadly unless you have a magic wand you may regret that statement.

New to partnership incentive

As I write this has not been extended into 2023/24 although sensibility would suggest it surely will be (not that sensibility always prevails). New partners in receipt thereof should be advised it is taxable but not superannuable. Make clear to the partnership and partner that a clawback directly from the practice will occur if that GP leaves within the first 5 years. With this in mind I would suggest practices exercise caution in paying all of the incentive out to the new partner, better to hold in practice funds and release into the working capital current account balance gradually.

New Partners are at a premium and it is a valuable service to offer clients the chance for all prospective new partners to talk to the practice accountant about what it means to be a new self-employed partner generally and specific to that practice. The key points I would discuss:

  • Working capital build up – with or without new to partnership incentive.
  • Property buy-in, timings, affordability issues and advantages and disadvantages over a practice in a leased premises.
  • Equalisation of current accounts and what their current account balance really means and how it will change year on year.
  • Partnership Deed - and how the financial clauses therein are vital to understand.
  • Rises to parity where applicable.
  • Lease terms and property dilapidations provisions.
  • NHS Property Services – Health Centre charges both historical creditors and the uncertainty going forward.
  • Profits v drawings and the basis of taxation.
  • Superannuation and the NHS Pension scheme.
  • Profits go down as well as up!

Property buy-ins

The current inflationary times and cost of living crisis is as we know pushing interest rates up. Partnership property owning changes need to be discussed very carefully in terms of the net property revenue and the affordability of new loan terms. Getting involved with lender discussions early with your client will enable you to help the client understand the ramifications of the different options that they may be given by the lender. Reference to the partnership deed is essential when advising.

Retirement planning

This is important both in terms of the retiring GP but also the succession planning of the partnership. It may be an opportunity to look at patient to doctor ratios, use of other non-GP clinicians and maximising the ARRS staff input into the running of the practice where possible.

Primary care networks

The size and complexity together with the uncertainty of the future needs to be fully discussed and is a much wider topic than this article. At basic practice level practices need to understand the meaning to them of a PCN surplus share and how this will effect tax bills together with the importance of a voice at PCN level to get monies paid out to practices for delivery of the DES at the earliest possible opportunity. No doubt there is very real likelihood that more core funding will come in via the PCN route and careful planning at PCN level will remain of enormous importance.

In such busy times in general practice finance teams are not always claiming all that is due to them for work done by the practice. It is really important for us to highlight where this may be happening.

Drugs recovery percentages are decreasing for many practices both in terms of personally administered drugs and dispensing results. Carefully look at margins and how they compare to what might be expected and consider with the practice how tight controls are to ensure the maximum possible profits are made therefrom.


Registered practices may need a VAT health check to make sure VAT returns are being completed accurately. As many practices grow in size and with the interaction of PCN’s be careful that VAT registration is not ignored when the VAT exemption limit is likely to be exceeded.

Can you offer a pre accounts preparation accounting records tidy up – this can work well for client and for accounts preparation efficiency.

NHS pensions

Consider exposure to AA tax charges for 21/22 and 22/23. High profit levels in 21/22 for many practices are likely to lead to many GP’s being caught. Make sure GP’s are talking to experienced financial advisors with regard to any pension decisions and particularly Scheme Pays Election decisions. There are a number of changes on the horizon likely to come into law very soon as well as the McCloud judgement rebasing set to take place later this year. Changes to the CPI inflation adjustment and flexible pension drawing – are areas to watch and we will discuss and advise via our conferences and webinars when we are able in this respect.

Declaration of high earners

A very thorny subject but unless things change the first declaration required under the GMS/PMS contracts is due by the 30/04/2023. Whether we agree or do not agree with the fairness of this unless waived at the last minute again non declaration is technically a breach of contract so we should not be seen to actively encourage non declaration.

Watch out for fraud in general practice, it is a sad reality of tough financial times that cases of fraud can increase. As advisors the message we need to give is for the practice to have adequate internal controls to minimise the risk thereof. When preparing accounts be alert to staff salary variations other staff costs and the ability for practice staff to employ and decide pay rates without adequate control and knowledge of the partners. Hopefully they remain rare and it would not be in our accounts engagement to find all frauds but we can help educate our clients as to where they need to be alert at times when they are over worked and over tired.

As a final point I am being asked more regularly than ever before to carry out independent accounts reviews for a leaving partner in dispute with the partnership. There would seem to be more than normal levels of disputes building up and to that end we all need to be doubly careful that when preparing the accounts we apply all clauses of the partnership deed carefully or if waived/ changed by partners we have this in writing to back up our working papers. Usually it boils down to a lack of understanding at practice or partner level that can be carefully explained and the clearer the accounts are in terms of profit sharing, prior allocations and charges and treatment of unusual items the easier our task in explaining will be.

*The views expressed are the author's and not ICAEW's.