Having the business pay your tax?

JerryBunny

I work within a GP surgery and am concerned about the tax aspects of the GP's pay and his overall financial dealings.


There are many examples within the accounts whereby the above named would simply pay himself whatever he liked for any particular month. Business rates were once refunded as they had been overpaid for a couple of years, which was quite a large sum – he duly took this for himself. At times he has paid himself in one month more than the Practice Manager is annually paid yet refuses point blank to allow the heating on for an extra hour or pay for more staff when we have meetings with staff who literally plead for help!


The NHS were awarded a 1% increase in pay – he has refused to allow the staff this increase.

This is not my main concern however.


He also pays his income tax and his personal pension contributions through the Practice budget; in effect he pays nothing to the state for his excessive earnings.

I am aware that financial dealings with Partners can be lucrative, based on what you save at the end of each financial year, but this man genuinely does believe he can do whatever he likes!


Is he allowed to have the business pay his income tax and pension?

[Deleted User]

While you are correct in say that the payment in respect of his tax and pension is paid by the practice, this is only by virtue of it coming out of the practice bank account. However, it is a personal drawing and is NOT a business expense and will not have any effect on the practice profits.If the practice has sufficient funds (his funds) he can pay any personal expense from that account if he so wishes.

The practice is his business and what monies he decides to withdraw from his bank account is entirely his affair - the bank balance belongs to him (as do any debts pertaining to the practice).

With regard to the business rates - presumably he owns the GP premises? Again, his Board will reimburse the business rates under his contract - any overpayment increases his income and profit and is entirely his to draw upon. Similarly, as with any business, he can pay staff (presumably not trust staff) as much or as little as he chooses.

On the basis that you have described, you have no reason to be concerned.

Pennywise

As Purdy rightly says, most GP practices are the GP(s) being self employed, running their own businesses. The NHS pays them according to various scale/fees etc., and it's up to them as to how many staff, what wages to pay, what overheads to incur etc. Staff are employees of the GP practice, not the NHS, so it is up to him what he pays his staff.

JerryBunny

It would seem that GP partners, especially single partners, can do whatever they like, to whoever they like and pay themselves whatever they like under the guise of "it's my business" even though the NHS simply give them "Partner" status to make it profitable and take responsibility away from the NHS to make it work. The premises is rented.


Thank you for your time. No wonder the NHS is on its knees when you effectively licence GP's to become a bully and support making them rich. I need a different line of work!

Pennywise

JerryBunny wrote: »

Thank you for your time. No wonder the NHS is on its knees when you effectively licence GP's to become a bully and support making them rich. I need a different line of work!

It's nothing new. Most GP's have been self employed and running their own business for many decades now. Yes, many of them do take the mickey and pocket excess profits which should be spent on patient care. But that's not really much different from the employed hospital consultants who do private work on the side yet use hospital staff and facilities for their private work!

I think the bigger issue with GPs is that they're profiting from the GP shortage. The GP practice gets the same money per patient whether the patient has to wait a day or a month for the consultation, so it actually pays the GP to be under-staffed and increase waiting times - they get the same money from the NHS but save on paying wages! It's strange that the things they get extra money for, such as flu injections, diabetic checks, etc don't have the same delays and are far easier to get appointments for!!

The only answer in your situation is to find yourself a job in a different practice who have a better attitude towards staff and patients. Vote with your feet! You'll not change your current employer.

bob_bank_spanker

As Pennywise says, it has ever been thus. GPs don't give a fig about the NHS, and have remained outside it's financial control since it was formed in 1948 - it was the only way they would agree to it at all. Doctors have become holier than thou in the modern narrative, but a sizeable proportion of them are as mercenary as any CEO out there.

[Deleted User]

Pennywise wrote: »

It's nothing new. Most GP's have been self employed and running their own business for many decades now. Yes, many of them do take the mickey and pocket excess profits which should be spent on patient care. But that's not really much different from the employed hospital consultants who do private work on the side yet use hospital staff and facilities for their private work!

I think the bigger issue with GPs is that they're profiting from the GP shortage. The GP practice gets the same money per patient whether the patient has to wait a day or a month for the consultation, so it actually pays the GP to be under-staffed and increase waiting times - they get the same money from the NHS but save on paying wages! It's strange that the things they get extra money for, such as flu injections, diabetic checks, etc don't have the same delays and are far easier to get appointments for!!

The only answer in your situation is to find yourself a job in a different practice who have a better attitude towards staff and patients. Vote with your feet! You'll not change your current employer.

I don't normally take issue with you on any points but some of what you have said isn't wholly correct. In 2004 GPs signed up to a new contract where much of the financial management was passed to them Their income from that point was largely divided into two areas. Firstly a global sum (the money per patient that you mentioned) and an achievement payment. This was not all extra money - don't meet the achievement target and lose money!

Patients are placed on registers (diabetes, stroke, asthma etc). So, for example, it is necessary to hold a diabetic clinic from time to time to assist in achieving targets. If you don't meet the targets you get no points and your income is reduced - you do not get an increased payment for meeting the target. Similarly with influenza - patients in different disease registers are entitled to receive the vaccine and the GP must provide this under the contract. The GP will receive a payment but will incur additional costs from own staff and from outside agencies. Don't get me wrong - some completely milk the system and the whole area of 'notional rent' is bordering on the ridiculous (how is rent paid to a GP for the NHS use of his/her premises pensionable income? You, with a similar background to mine, know that rental income would not be earned income in any other sphere!)

The real problem is the lack of GPs. Simply, there is a chronic shortage all over the UK. Six practices in Wrexham (out of 25) have closed in the last twelve months - the GPs have walked! In Fermanagh in NI a warning was given last year- 13 of 18 would close in the short term - eight have done so within ten months and one more is closing before the end of the year. The practices are closing - there are no replacements. Trusts are taking over the practices. Neighbouring GPs are being forced to take on the patients of the closing surgeries (this does not increase income pro-rata, quite the reverse) and the GP's ability to provide safe care for patients in being jeopardised.

From outside, when I looked after the tax affairs of at least twenty GP practices, I was of a similar view. For the last fifteen years I have worked for a number of practices and still do - the whole system is heading for disaster! It is my firm belief that GPs will be PAYE in the near future.