Partners could be cheaper than salaried GPs after tax change

Practices may find it is cheaper to take on a partner than to employ a salaried GP after changes in tax rules that took effect from 6 April, according to GPC guidance.

Dr Watson: the trend towards practices hiring more salaried GPs and fewer partners after the 2004 GMS contract came in has begun to fade
Dr Watson: the trend towards practices hiring more salaried GPs and fewer partners after the 2004 GMS contract came in has begun to fade

Salaried GPs cost practices around £90,000 per year to employ, the guidance says. This is based on an average salary of £71,000, plus a 12.8 per cent national insurance contribution and 14% employer’s superannuation contribution.

Average income per partner in England for 2008/9 was £105,300 including all private earnings. But for non-dispensing GPs the figure was £95,900 and rising expenses have pushed this down since that date, the GPC said.

Practices employing salaried GPs may have a higher liability for costs if salaried employees are off sick or go on maternity leave, the guidance said.

From 6 April, a 50% income tax rate on income over £150,000 came in. Meanwhile, the personal allowance, which for 2010/11 means tax is not paid on the first £6,475 earned, is gradually withdrawn for those whose net income exceeds £100,000.

The GPC advice said this means it may become worthwhile for high-earning GPs to cut their income by taking on another partner.

GPC member Dr Nigel Watson said the trend towards practices hiring more salaried GPs and fewer partners after the 2004 GMS contract came in has begun to fade.

‘We’ve noticed in the counties Wessex LMCs covers that there are more partnerships being advertised,’ he said. ‘People are looking at taking on partners.’

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register

Already registered?

Sign in

Follow Us:

Just published

GPs hit out over 'unacceptable' bid to force them into 62,000-patient network

GPs hit out over 'unacceptable' bid to force them into 62,000-patient network

London GPs have hit out at plans to force them into a primary care network (PCN)...

Government facing legal action over state-backed GP indemnity

Government facing legal action over state-backed GP indemnity

A leading medical defence organisation is launching legal action against the government...

Guidelines for GPs based on 'opinion rather than evidence'

Guidelines for GPs based on 'opinion rather than evidence'

Many GP guidelines are based on 'opinion rather than evidence' and could drive up...

Wellbeing for GPs: Advice for newly-qualified GPs

Wellbeing for GPs: Advice for newly-qualified GPs

Dr Anish Kotecha offers new GPs some practical tips on how to ensure their wellbeing...

Hospital takeovers of GP practices 'against spirit of NHS long-term plan'

Hospital takeovers of GP practices 'against spirit of NHS long-term plan'

Vertical integration schemes that involve GP practices becoming subcontractors to...

NHS Counter Fraud Authority to investigate 'losses to fraud' in general practice

NHS Counter Fraud Authority to investigate 'losses to fraud' in general practice

The NHS Counter Fraud Authority has identified possible fraud around GP capitation...