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Primary care networks (PCNs) were first introduced on 1 July 2019, and the question of whether to form a PCN company is as topical as ever.

By PCN company, we’re referring to the provider entity scenario described on page 11 of the BMA’s primary care network handbook.

One of the reasons that this is such a hot topic is the benefits that forming a PCN company can bring.

Benefits of forming a primary care network company

Should you form a PCN company? Well, the benefits of PCN companies are that they:

• allow for the creation of a VAT cost sharing group to overcome the issue of PCNs breaching their VAT threshold;
• provide a single entity for employing staff, on consistent employment terms, which can easily become muddled otherwise;
• resolve the PCN tax on surplus issue by accessing 19 per cent corporate tax rates, compared with the 40 to 45 per cent personal tax rates;
• allow for more formal governance and decision making by a delegated board, which can often become unwieldy in PCNs;
• limit any liability to the partners, however remote this eventuality may be, away from an unincorporated environment where personal assets are at risk;
• make accounting much simpler, since they create a separate entity; and
• can allow the entity to be party to alternative provider medical services (APMS) contracts so that it can then receive the PCN DES funding directly under a lead provider model.

We can help you form a PCN company

Deciding whether to form a PCN company can be tricky. We can help, first by explaining some of the potential drawbacks involved. To help you decide, we can also:

• attend virtual meetings to discuss the issue with either the whole of the PCN member practices or with the management group;
• create a tailored board paper for your PCN, assessing the option ready for a vote on this subject; and
• run a workshop, alongside specialist solicitors, to discuss the issue and answer any questions.

If you do decide to go ahead and form a separate corporate entity, then we would:

• form the company at Companies House;
• establish a VAT Cost Sharing Group (if required);
• deal with other statutory notifications, such as registering for PAYE and Corporation Tax;
• help you apply for the pensions determination to allow you staff to have access to the NHS Pension Scheme; and
• work with a specialist solicitor to ensure that the company’s governing document was correctly worded and that the new entity is correctly embedded into the PCN network agreement.

Contact us to discuss your needs

Our tax and medical sector specialists can provide the advice and practical support you need.

Contact James Gransby to talk about the right operating structure for your PCN.