The financial implications of becoming a partner in a GP practice can be daunting. You may have previously experienced the relative security of a salaried role where your monthly income was likely to be stable and predictable, and tax and national insurance was deducted at source through monthly payroll.
Taking the leap into GP partnership brings uncertainty around monthly drawings payments and share of annual profits. Many new partners are anxious about self-employment, where tax bills are paid every six months through self-assessment. Some new partners may also be facing steep amounts to buy into working capital and/or practice property.
Whilst these concerns are all perfectly understandable, they should not stop you from becoming a GP partner.
Here are five things to consider before you decide:
1. ‘Golden hello’ offers excellent incentive
Now is an excellent time to be considering making the move to GP partnership. There is a £20,000 ‘golden-hello’ being offered to new GP partners from 2020/21. This is a brand-new incentive to create additional GP partners and will assist new partners with working capital buy-in.
2. Training grant eases the transition
In addition to the golden hello, new partners will also have access to a £3,000 training grant to support early partnership skills. This will include training on items around GP practice finance which will help make the step into partnership less daunting. We can assist in providing this training so please do contact our Medical Director Adrian Cousens to find out more.
3. Earnings potential increases – but no certainties
In our experience, GP partners earn significantly more on average than their salaried counterparts. However, there can be no guarantee around this, and the level of profit earned by a partner can always go up or down. This is one of the risks and rewards of partnership, but an expert medical accountant will help you to assess the financial stability of the practice and indeed your earnings potential.
4. Trial periods provide certainty over cultural fit
A decision on becoming a partner should be based on more than just the financials. Ensuring you can work comfortably, and with trust, alongside the other partners is paramount. You should seek to understand the culture of any practice you may join as a partner and mutual trial periods may be a good idea before you formally become a partner.
5. Partnership agreements should be scrutinised
Once you do make the important decision to become a partner, it is vital that you sign up to an up-to-date partnership agreement. It is crucial that you read this document thoroughly and understand it before signing it. Cutting corners could come back to haunt you, so ensure you take this process seriously.
We can help
Most GP partners are not experts in finance. But through planning, research, and good advice from an accountant with GP practice expertise, many of their fears and uncertainties around the financial implications of becoming a partner will ease.
Contact Adrian Cousens to discuss your situation and watch our videos below for more detail on what to consider when becoming a GP partner.
Watch our 'New to GP partnership' video series below