Finance diary, June: How to boost private income and make it worthwhile
With profits under pressure, GPs looking for non-NHS income will need to work out if the effort will pay off, writes Bob Senior
As profits are under pressure, it may seem attractive to seek private income.
While most practices receive some non-NHS income – from private medicals, copying patients’ notes and signing forms – there are a number of other opportunities GPs can consider. These include specialist medicals such as for divers or airline pilots, occupational health work for local companies, providing services to private schools, travel clinics, and cosmetic procedures such as Botox or laser treatments. But in some cases it can be easier said than done.
The most serious concern is that practice and partners could get distracted from running the practice – and mismanage other key work such as enhanced services or the QOF.
A careful assessment of how any private work might impact on workload is essential. For example, if a partner leaves on the dot of 12.30pm every Wednesday to get to a private clinic, leaving the other partners to deal with extras and visits, this is likely to cause tension.
Problems can also arise if the partnership agreement is not clear on what should be regarded as practice income. GP partners who are tempted to take on private work need to check the partnership agreement and discuss their plans with the other partners.
Tax can also be an issue. Additional income earned by a GP will be taxed at their top rate – a problem for someone earning just under £100,000 a year, since income between £100,000 and £120,000 is effectively taxed at 60%. So a GP on this income earning an extra £10,000 a year from private work may take home only £4,000 after tax.
Time versus money
GPs also need to work out whether the hourly rate is worthwhile. If a practice is offered £10,000 a year to look after a care home, the residents may need the equivalent of a weekly ward round. This would take the GP out for one session a week, leaving the practice to fill in with a salaried GP. This might cost £8,000 a year, which, with superannuation and national insurance contributions, would total nearly £10,100 (a net loss of £100).
Bob Senior is chair of the Association of Independent Specialist Medical Accountants and head of medical services at Baker Tilly