Partnership Accounts for Doctors & Healthcare Professionals

What do partnership accounts include?

Partnership accounts include a profit and loss account, a balance sheet, and individual capital accounts for each partner. They show the total income generated and how profits are shared according to the partnership agreement. These accounts form the basis for the partnership tax return. They do not currently fall under the MTD for Income Tax rules starting 2026.

What is the partnership tax return (SA800)?

Many doctors and healthcare professionals must file a Self Assessment return: you need one if you have untaxed income such as private, locum or self-employed work. A high PAYE salary alone does not require Self Assessment for 2026/27; check HMRC's current criteria and any notice to file. The online filing and payment deadline is 31 January after the tax year ends. Under the non-MTD rules, late filing normally triggers an initial £100 penalty, with further penalties for longer delays. A different regime applies from the tax year you join MTD for Income Tax.

Help with this question: Self Assessment Tax Returns for Doctors & Healthcare Professionals

How are profits shared and taxed?

Doctors and healthcare professionals pay income tax on taxable profit at 20%, 40% and 45%, plus Class 4 National Insurance on self-employed profit. Payments on account mean your first bill can include half of next year's tax too. Where income also comes from overseas, residence status and split year treatment decide what the UK taxes.

How much should partners reserve for tax?

Partners should typically reserve enough to cover their semi-annual payments on account due on 31 January and 31 July. Each payment is normally half the previous year's total tax liability. It is prudent to set aside a percentage of monthly drawings based on expected tax rates. We provide guidance to help partners estimate these future liabilities.

What happens when a partner leaves?

When a partner leaves, the practice must calculate their final share of profits and capital account balance up to the cessation date. The partnership agreement usually dictates how the buyout is funded and over what period. The leaving partner must report their final profit share on their personal tax return. We assist practices with these complex transitions.

What deadlines apply to partnerships?

Many doctors and healthcare professionals must file a Self Assessment return: you need one if you have untaxed income such as private, locum or self-employed work. A high PAYE salary alone does not require Self Assessment for 2026/27; check HMRC's current criteria and any notice to file. The online filing and payment deadline is 31 January after the tax year ends. Under the non-MTD rules, late filing normally triggers an initial £100 penalty, with further penalties for longer delays. A different regime applies from the tax year you join MTD for Income Tax.

How are pension contributions shown?

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.

Help with this question: NHS Pension Tax & Annual Allowance for Doctors & Healthcare Professionals

Can a partnership incorporate?

A limited company can suit doctors and healthcare professionals 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.

How much should GP partners set aside for tax from drawings?

GP partners should generally set aside a significant portion of their monthly drawings to cover future tax liabilities. Payments on account are due on 31 January and 31 July each year. Your specific percentage depends on your total earnings and other income sources. We calculate these liabilities in advance to help you manage cash flow.

What is the difference between drawings and taxable profit?

Taxable profit is the total income minus allowable business expenses, regardless of what you took out. Drawings are the actual cash sums you withdraw from the business for personal use. You are taxed on the profit earned, not the amount of drawings taken. If drawings exceed profit, you are essentially withdrawing your own capital.

How are superannuation adjustments shown in GP accounts?

GP accounts should reconcile estimated NHS pension contributions with the final certified position and show how adjustments affect each partner’s account. Partner pension contributions generally belong in the partner’s personal tax relief calculation, not as a deduction from partnership trading profit. Treatment depends on the contributor and transaction, so reconcile accounts, certificates and returns together.

Help with this question: NHS Pension Tax & Annual Allowance for Doctors & Healthcare Professionals