Mr Mathew Watson
Chartered Accountant and Chartered Tax Adviser
Ballards Accountants

Blanket Advice Is Wrong, Is Integrated Advice Right?

I was recently assisting a new Consultant setting up in Private Practice. She was directed to a Facebook help page by one of her colleagues which purported to provide advice for new Consultants wishing to undertake private work. This site was full of questions concerning pension Annual Allowance issues, with the advice that she must reduce NHS sessions or face large Annual Allowance charges.

Although, this advice may be pertinent in some cases, to offer it as blanket advice is wrong. Something I have learnt whilst acting for hundreds of Consultants at all stages of their career and private practice, is that advice is “personal” and definitely never “one size fits all.” Many Consultants have expressed their frustration to me that contradictory advice is given about Annual Allowance issues as well as many other important subjects such as; should I practice as a company? Can I pay school fees from my company? Can I give my spouse 99% of the share capital?

For this reason, it is imperative that we can fulfil a “trusted adviser” role. That is, being able to provide reasoned and correct responses to queries, which are HMRC proof(!), that will be tax efficient and will stand the tests of time with ultimate level of pensions and charges.

We wish to expand the role of “trusted advisor” to mean more than just accountant and tax advisor, but to cover all areas of private practice including; legal and indemnity advice, and also practical advice from clinicians who have set up different types of private practice. We wish to provide you with a panel of experts who can provide trustworthy advice. The question I would like to ask is whether this would be of interest and help? 

An example of how this approach helps Consultants is the establishment of group private practice. A team approach has been vital in securing this for some groups. If an individual Consultant requests additional work from their own Trust, the Trust will be delighted to provide it, but usually on the grounds as overtime employed work rather than private practice work. This may not be attractive because of the potential pension annual allowance issues, as well as being unable to claim tax deductible expenses against the income. 

The irony is that in many instances, the Trust may then contract with an outside provider to undertake the additional work. The outside provider then asks you if you would like to undertake this, (via your company if you wish). An alternative to this, would be to set up a group LLP, with the members being individual companies or self-employed clinicians (depending on personal circumstances). This set up, done correctly, addresses many potential issues. It offers the Trust a practical solution to help achieve their clinical targets, whilst being compliant with IR35 issues and helps to avoid the risk of falling foul of “agency” rules and VAT issues. The Consultants have a tax efficient platform through which to work, which helps to mitigate tax and annual allowance issues. The approach and legal agreements with the Trust and the individual members is provided via an SLA agreement and with experienced clinicians guiding it.

The group has a sophisticated accounting system which provides clear information of the work undertaken by each entity and helps to provide the individual company or self-employed accounts. The question I would like to pose is whether this service of integrated professional advice is something which would be interest and of use?

Feel free to let me know your thoughts on this or any other issue you would like to discuss on or call me on 01905 794 504.