When setting up a new business arrangement, you have a number of options for the way you can structure it.
There are several types of legal status that affect issues such as how your business will operate, how it is recognised in law and what would happen to any business debts.
Each type of legal framework has its own benefits and drawbacks, and it is important that you choose the option best suited to you.
There are four main types of legal status for a business: sole trader, partnership, limited company and community interest company/mutual.
You need to consider several issues, including tax, administration, business image, legal requirements and financial matters, when deciding which would be best for you.
Ask your business adviser, accountant, or solicitor for advice about which form of legal status is best for your new business development and about the tax implications. - Maggie Marum
NAPC members can obtain more information at www.napc.co.uk.
Q: I am setting up a company to run other GP surgeries. We have been approached by a three-partner practice that has a GMS contract with their PCT. The practice would like us to buy their building, run their surgery and retain them as salaried GPs. Would we be on the current contract with the PCT, or would the PCT contract with us via PMS or APMS?
The contract is specific to the practice and the PCT. If the practice dissolves the contract, the PCT must then commission to fill the list, probably by advertising or tender.
You would apply for this and the contract would most likely be APMS.
If you were successful, you could re-employ the former partners, but these GPs would not be guaranteed employment if you were unsuccessful. The best way forward is for you to meet them and the PCT. The PCT should work closely with all of you, because it is in its interest to maintain patient care. - Dr Mo Dewji
Q: I am a GP practising in a two-partner dispensing practice. A friend of mine works in another two-partner dispensing practice 10 miles away, with similar income.
They have a different PCT and accountant. Our accountants have submitted the new certificate of superannuable income to our respective PCTs and the outstanding amounts will be deducted from our next PCT payment.
However, there appears to be quite a discrepancy between our payments.
I am paying just over £13,000 and my friend is paying just over £400.
We have been puzzling over why there should be such a difference. One reason is that his superannuation payments are capped because of his age (he is 41 and I am 44) and he might have been paying more on a monthly basis to his PCT for superannuation.
Interestingly, he is not paying superannuation on his dispensing income. I thought that under the GMS contract, dispensing income was now superannuable. But his accountants say this is optional and as such, the GPs decided not to have it superannuated.
Could you clarify why there is such a discrepancy and if it is optional to superannuate dispensing income?
There can be significant financial differences for GPs working in different practices, even though their circumstances appear to be very similar.
Routinely, one difference for you and your friend would be that the annual cap was relevant and had been exceeded.
I can find nothing in the new regulations which states that dispensing income is not superannuable. Profits under new GMS dispensing are, as far as I am concerned, superannuable and should therefore be included in certificates. - Stuart Williamson
I am unsure about the limit that applies to all those who joined the NHS Pension Scheme after 1 June 1989. Is the maximum on which superannuation can be paid for 2004/5 £102,000? Do earnings from out-of-hours, with or without a contract with the provider, count towards superannuable income?
If you joined the NHS Pension Scheme after 1 June 1989, your superannuable income will be capped to the limit set by HM Revenue and Customs, which is £102,000 for 2004/5 and £105,600 for 2005/6, so even if your superannuable profits are, say, £130,000, you can only pay into the NHS pension based on the limit. Out-of-hours earnings are only superannuable if the provider is a registered NHS employer. - Jenny Stone
ASK THE EXPERTS
NHS RULES: Dr Tim Kimber is a Littlehampton GP and a member of West Sussex LMC. Email: email@example.com
ACCOUNTING: Stuart Williamson is a partner at accountants Williamson West. Email: firstname.lastname@example.org
LEGAL: Lynne Abbess is a partner at solicitors Hempsons. They can offer 10 minutes of free advice only, from 10am-4pm weekdays. Phone: (020) 7839 0278
PREMISES: John Hearle is a chartered surveyor and chairman of Aitchison Raffety. Email: email@example.com or fax: (01727) 844472
PENSIONS AND PERSONAL FINANCE: Kevin Quinn is a financial planner at Ramsay Brown & Partners. Email: firstname.lastname@example.org
PMS: Dr Mo Dewji is a Milton Keynes GP and clinical director for primary care contracting. Email: email@example.com
ACCOUNTANCY AND TAXATION: Jenny Stone is a partner at Ramsay Brown & Partners. Email: firstname.lastname@example.org or call (020) 8370 7746 9am-5.30pm weekdays
PRACTICE-BASED COMMISSIONING: Maggie Marum is a management consultant for the NAPC and runs its practice-based commissioning helpline. Call: 020 7636 8626. www.napc.co.uk
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