Question 1

How should nhs consultants structure private practice income?

Accepted Answer

Most private practices start as sole traders and incorporate once profits are well above personal spending needs. Groups of clinicians may use partnerships, LLPs or a shared company. The right structure depends on profit level, NHS pension membership, who owns equipment and premises, and how fees are billed. We set out the options in writing.

Question 2

Is a limited company worth it for private practice?

Accepted Answer

A limited company can suit NHS consultants with substantial private or outside-IR35 income that is not all needed to live on, because profit is taxed at corporation tax rates and can be paid out over time. It brings extra accounts, payroll and filing costs, and NHS employment income cannot move into it. We model sole trader against limited company on your real figures first.

Question 3

What is the tapered annual allowance and how does it affect nhs consultants?

Accepted Answer

The annual allowance is the amount of pension growth you can have each tax year before a tax charge, £60,000 for 2026/27. For high earners it tapers: if threshold income exceeds £200,000 and adjusted income exceeds £260,000, the allowance falls by £1 for every £2 above £260,000, down to £10,000. NHS pension growth is measured as a defined benefit input, not your contributions.

Question 4

Do nhs consultants need to charge VAT on private work or medicolegal reports?

Accepted Answer

Medical reports produced mainly for legal, insurance or employment purposes are generally standard-rated for VAT, unlike treatment aimed at protecting or restoring health. If your medicolegal fees exceed the VAT registration threshold you must register and charge VAT on them. HMRC Notice 701/57 sets out the rules.

Question 5

How are fees from private hospitals and insurers taxed?

Accepted Answer

Most health care by registered professionals is VAT exempt where the main purpose is protecting or restoring health, so many clinicians never register. VAT becomes relevant when you sell goods, provide cosmetic or medicolegal services, or exceed the registration threshold with taxable income. HMRC Notice 701/57 gives the official guidance.

Question 6

Can I claim medical indemnity and royal college fees?

Accepted Answer

You can claim tax relief on costs incurred wholly and exclusively for your work: HMRC-approved professional fees such as GMC, NMC, GDC or HCPC registration and approved royal college and union subscriptions, uniform laundering, and business mileage between workplaces. Ordinary commuting and most exam or training costs for new qualifications are not allowable. Employees can claim back up to four tax years.

Question 7

What is the best way to extract profit from a medical company?

Accepted Answer

Profit extraction usually involves a combination of a tax-efficient salary and dividend payments. The dividend allowance is currently £500. Corporation tax at 19% applies to profits up to £50,000, while the 25% main rate applies above £250,000. The most efficient strategy depends on your total personal income and the company's profitability.

Question 8

Will my NHS Pension be subject to inheritance tax from April 2027?

Accepted Answer

Most NHS doctors and many healthcare staff are members of the NHS Pension Scheme. Contributions are deducted through payroll, and locum or private work can count only through the correct forms. High earners should check the annual allowance each year, as pension growth can trigger a tax charge.

Question 9

Can I employ my spouse in my private practice?

Accepted Answer

Most health care by registered professionals is VAT exempt where the main purpose is protecting or restoring health, so many clinicians never register. VAT becomes relevant when you sell goods, provide cosmetic or medicolegal services, or exceed the registration threshold with taxable income. HMRC Notice 701/57 gives the official guidance.

Question 10

When should private practice income be reported to HMRC?

Accepted Answer

Medical reports produced mainly for legal, insurance or employment purposes are generally standard-rated for VAT, unlike treatment aimed at protecting or restoring health. If your medicolegal fees exceed the VAT registration threshold you must register and charge VAT on them. HMRC Notice 701/57 sets out the rules.

Question 11

What is a CT600?

Accepted Answer

A CT600 is the corporation tax return that limited companies must submit to HMRC annually. It reports your company's income, expenses, and tax liability. The filing deadline is 12 months after the end of the accounting period it covers. Medical.Accountants prepares these returns as part of our comprehensive company service.

Question 12

How much corporation tax will my company pay?

Accepted Answer

For eligible companies, the small profits rate is 19% and the main rate is 25%, with marginal relief between £50,000 and £250,000. These thresholds are reduced for short accounting periods and associated companies. Some companies are excluded from the small profits rate. We calculate the liability using taxable profits and your company’s circumstances.

Question 13

How should I pay myself from my company?

Accepted Answer

Company directors typically receive a combination of a tax-efficient salary and dividends. The dividend allowance is £500 for the tax year. The personal allowance of £12,570 is available but begins to taper away once income exceeds £100,000. We provide bespoke advice to ensure your remuneration strategy is compliant.

Question 14

What does an accountant for NHS consultants do?

Accepted Answer

An accountant for NHS consultants prepares your accounts and tax returns, keeps you compliant with HMRC deadlines and advises on the decisions specific to your work: how income is structured, which expenses are allowable, VAT where it applies and, for NHS scheme members, pension tax. At Medical.Accountants the work is quoted as a fixed monthly fee, agreed in writing before we start.

Question 15

Should a consultant use a limited company for private work?

Accepted Answer

A limited company can suit NHS consultants with substantial private or outside-IR35 income that is not all needed to live on, because profit is taxed at corporation tax rates and can be paid out over time. It brings extra accounts, payroll and filing costs, and NHS employment income cannot move into it. We model sole trader against limited company on your real figures first.

Question 16

What is the tapered annual allowance?

Accepted Answer

The annual allowance is the amount of pension growth you can have each tax year before a tax charge, £60,000 for 2026/27. For high earners it tapers: if threshold income exceeds £200,000 and adjusted income exceeds £260,000, the allowance falls by £1 for every £2 above £260,000, down to £10,000. NHS pension growth is measured as a defined benefit input, not your contributions.

Question 17

How much does an accountant for NHS consultants cost?

Accepted Answer

Our packages for NHS consultants start at £45.83 + VAT a month, with Core at £62.50 and Growth at £75 + VAT. The right package depends on your income sources, whether you trade through a company and any payroll, VAT or pension work. We confirm the exact fee in writing before any work begins, so there are no surprise invoices.

Question 18

Do NHS consultants need to comply with Making Tax Digital?

Accepted Answer

Making Tax Digital for Income Tax applies from 6 April 2026 to sole traders and landlords whose qualifying income (gross self-employment plus property income) is over £50,000, falling to £30,000 from April 2027 and £20,000 from April 2028. PAYE salary does not count. NHS consultants trading through a limited company or a partnership are not brought in yet. We set up compatible software and file the quarterly updates for you.

How you work	What we check	Support to explore
Employed or umbrella (PAYE)	Tax codes, eligible employment expenses and whether a tax return is needed.	Healthcare tax refund support
Genuinely self-employed	Business income and expenses, Self Assessment and MTD eligibility.	Healthcare Self Assessment service
Your own limited company	Company accounts, Corporation Tax, director income and off-payroll status where relevant.	Healthcare limited company accounts
Partnership	Practice accounts, allocated profit and each partner’s personal tax position.	Healthcare partnership accounts

NHS Consultant Accountants

What does an accountant for NHS consultants do?

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Problems we fix for consultants and specialists

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What we actually do for you

Pension modelling

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VAT review

Income planning

Accounts and tax returns

Fixed-fee advice through the year

Making Tax Digital

NHS pension tax

Private practice structuring

NHS Pension tapered allowance

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How should nhs consultants structure private practice income?

Is a limited company worth it for private practice?

What is the tapered annual allowance and how does it affect nhs consultants?

Do nhs consultants need to charge VAT on private work or medicolegal reports?

How are fees from private hospitals and insurers taxed?

Can I claim medical indemnity and royal college fees?

What is the best way to extract profit from a medical company?

Will my NHS Pension be subject to inheritance tax from April 2027?

Can I employ my spouse in my private practice?

When should private practice income be reported to HMRC?

What is a CT600?

How much corporation tax will my company pay?

How should I pay myself from my company?

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Accountancy packages for medical consultants

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