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Up to two years ago, very few young GPs wanted to be partners. The financial difference between being a locum GP or occupying one of the few salaried/associate posts was around £10,000.

A partnership was perceived as hard work with lots of non-clinical hassle, the added financial responsibility of running a business and, in 50 per cent of practices, property ownership.

An added factor was that until the new GMS contract only PMS practices could take on an associate GP without financial penalty. Therefore GMS practices, then a large majority, were forced to advertise for partners. All the above led to long lists of partnership offers in the medical press.

Why the change?

Now job adverts are full of associate posts with far fewer partnerships. Let's be honest, the major factor is clearly now financial. While the average associate earns £65-£75K, a partnership is worth well into six figures.

Young GPs are therefore much more interested in becoming a partner and conversely existing partnerships more interested in taking on an associate. This is hardly surprising; the laws of economics influence all jobs in all areas.

However, some vacancies are still available, albeit oversubscribed. Each partnership will have a critical mass of partners which is governed by several factors including practice list size, personalities, business ethos, amount of non-NHS work, property ownership and existing partner numbers.

For instance, a practice with a list size of 10,000 and two current partners is unlikely to manage with one partner only if the other retires.

Achieving partnership

There are several routes to partnership. One is to join a practice that has at least one partner near retirement in the hope that, by the time this happens, the remaining partners will recognise the quality in their midst!

Actually, salaried posts 'with a view to partnership' are by no means unusual.

All associates will need to be able to show they can blend into a partnership as seamlessly as possible. This implies a wide range of good clinical skills with at least two years' experience.

As well as this, associates need to show understanding and preferably experience of the administrative, business and financial aspects of partnership.

This is best done by selective reading, seminars and, most importantly, by building experience from within associate posts. Existing partners should start to encourage this if they want high-quality future partners.

Making the financial change

Be in no doubt that, despite nGMS, it is still harder work and longer hours as a partner, so you will earn your higher income! Try to get involved quickly and build relationships with your new partners. It is absolutely crucial you do this.

Responsibilities both clinically and, especially, non-clinically are greater. You will be able to focus more effectively on these if you organise your finances carefully from the start. Use the following headings as a guide.

Accounts and accountant

You should have seen two or three years' worth of practice accounts before formal acceptance of the post. While you should have taken expert advice on these, as a partner you must be able to interpret the different areas of annual accounts both from a personal and practice viewpoint.

One of the existing partners should be able to familiarise you with them. Make sure that you then study each subsequent set of accounts carefully. You should have your own copy of them.

You have probably not had an accountant up to now. Make sure you are introduced to the practice accountants. You may use them for your personal accounts, or choose an accountant yourself. Although you can do your own personal accounts, I would strongly advise that you do use an accountant as the risk of mistakes is high.

Ask the partners who they use and get a quote on the fees. Once chosen, ask your

accountant for advice on tax and national insurance. Keep a careful record of all your income and medically-related expenses. Your accountant can give you a list of these.

Income tax

As a partner you will be regarded as self-employed for tax purposes. If you were previously an employed associate your income tax would have been deducted automatically by your employer.

From now on you are responsible for paying your own tax and your monthly drawings will be paid gross, unless your practice saves the tax on your behalf.

First, you should let the Inland Revenue know in writing that you are now a partner and the date you started work. They will register you as self-employed and send you a tax return at the appropriate time.

You will pay tax six monthly, at the end of January and July, based on your previous year's self-employed accounts. Unless you were a self-employed locum previously, you will not have any of the latter.

You will therefore have up to 21 months before you pay any tax, depending on your practice's accounting year-end and when you joined.

Despite this it is advisable to get into the habit of saving for tax monthly, in a high-

interest account of course. Ask your accountant for an estimate of your first tax bill and when this will fall due.

National insurance

Instead of class 1 national insurance you will now pay class 2 and class 4. The latter is paid six-monthly with your income tax. The former (£2.10 per week for 2005/6) is usually set up as a monthly deduction from your personal bank account. Ask your accountant for advice.


As a GP associate 6 per cent of your salary was deducted automatically by your employing practice, which added 14 per cent employer's contribution and paid this to the NHS Pensions Agency on your behalf. GP principals pay the same percentage superannuation but based on NHS profits. As this figure can only be calculated by the accountants several months after the financial year-end, your PCT will deduct an estimated figure monthly or quarterly for all partners. Ask your practice manager to ensure you are included. An annual balancing payment is also paid for all partners and most practices make an allowance for this.

Keep all documents regarding superannuation and once a year ask the pensions agency for your updated records.


Most practices issue fixed monthly drawings based on the accountant's estimate of profits or their advice. You should already be aware how much your drawings will be. Once the accounts are agreed for the first financial year in which you were included there is usually an extra payment.

Remember that partners' drawings often vary due to differing seniority levels and agreed prior shares. The latter are for items such as rent reimbursement and some private income for which the practice agreement makes provision.

Personal private income

Read the practice agreement carefully. This will detail which private income can be kept individually and which must be shared by partners. Normally income earned outside partners' working hours is kept individually unless it can be shown to have taken work away from the partnership. It is always safer to clear all personal private work via a practice meeting.


Most practices allow seniority to be kept personally. Payments now start after only six years' NHS service and rise annually. Let your practice manager and PCT know the exact date you started NHS work.

Life insurance and

income protection

As you will now be on a higher income, take the opportunity to review life insurance and income protection, increasing cover as needed. Take the 'death in service' and 'ill-health retirement' benefits afforded by the NHS pension scheme into account.

Property ownership

You should already be aware if your partnership owns its premises and whether you will be offered the chance to buy a share.

Ideally this should only be after two or three years. Discuss the pros and cons with an independent adviser. Find out loan costs, the current value of the property and rent reimbursement. In most cases buying a property share is a great financial deal.

While the above may seem daunting, your financial expertise will grow with time. It is likely you will enjoy this side of practice.

John Couch is a GP in Ashford, Middlesex

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