Most of the practices I saw over the past month have seen their list size increase and consequently most have managed to maintain their profits. While new building in the local area accounts for some of the list size, the most significant factor is the list dispersal from other practices.
The difficulty in finding locums and salaried GPs means that in many cases the workload has had to be absorbed by the partners. So profits look ok, but the accounts don’t reflect the increased number of hours the partners have had to work to achieve them.
Publishing GP earnings
We have also been talking to our clients about the details of their earnings that will need to be published for 2014/15 on their website.
For 2014/15 practices need to publish the average earnings of the partners, locums and salaried GPs who have been in the practice for more than six month.
A major oddity is that every GP included is deemed to be full time, so a practice with part-time GPs is going to declare lower earnings than a similar practice with more full-time GPs. In fact some of our practices’ average earnings are showing figures of less than £25k. Perhaps a charity box for the partners would be appropriate?
Concerns from the Budget
The chancellor’s Budget at the beginning of July has some concerns. So many tax claims are now dependent on whether you are a basic-rate, higher-rate or very-high-rate taxpayer. We are shifting from a system in which a claim was legitimate on its own merits do being dependent on how much the individual earns.
I am also troubled by the change in taxation of dividends. Instead of paying the extra tax at the individual’s highest rate of tax, each taxpayer has a £5,000 exemption against any dividend income and then the excess is taxed at either 7.5%, 32.5% or 38.1% depending on the income of the individual.
What worries me is that such a system can be easily adjusted, the £5,000 exemption can be reduced at a whim and the rates of tax increased – just look at what has happened to the pensions annual allowance.