General practice has, in recent periods, been subject to a number of changes which have served to make it more difficult to achieve consistent and growing profits. Continuity is key for any business for strategic and operational planning, with uncertainty about future income streams and initiatives making this very difficult to approach. With future changes to the main contract for services, practice’s will continue to find it difficult to plan beyond 2-3 years.

The above becomes a major factor in attracting young talent to join practices which would again assist in development and allow planned exit for retiring partners. A salaried GP role supplemented by locum support can appear to be a more attractive option for young doctors. There can therefore be a danger in deferring retirement planning which is merely storing a problem for the future.

From our experience in order to maximise your return the following are key areas:

– work hard to create a motivated and loyal workforce
– take practice management seriously and employ an experienced practice manager
– be prepared to embrace a flexible approach to the delivery of care which will allow you to benefit from projects/initiatives essential to achieve expected profit levels
– be an active member of the regional GP alliance
– obtain professional support for accounting and taxation
– address pension planning

Turning to the professional support available, taxation for GP’s has required close attention over recent years. For many there has been a squeeze on income through 45% and 50% tax rates, loss of allowance and means tested child benefit. In addition to this, there is the increased pension contributions through the NHS pension scheme and the possibility of restricted tax relief on these higher contributions. Going forward, once any unused pension relief from the last three years is exhausted, higher rate tax relief can be restricted to £10,000 of contributions per annum. There is also a cap on lifetime allowance for pensions at £1M, this is a level which will easily be achieved ahead of retirement and needs careful management prior to this date.

To maximise your return from Medical General Practice, you require an advisor with good commercial knowledge of GP practice along with the ability to review the current and projected tax position. Working closely with a regulated pension advisor will complete the loop and provide alternative investment opportunities beyond a maximised pension pot.

Jonathan Curwen heads up Afford Bond’s medical sector and can be contacted at jonathan.curwen@affordbond.com or 01270 623731