NHS & GP Financial Matters
Because "I just want to help patients" is noble — but the practice still needs to pay its electricity bill.
📥 Downloads
Handouts, teaching slides, and GP finance summaries — ready when you are. Perfect for tutorials, half-day release, or last-minute rescue revision.
path: NHS & GP FINANCE
- funding in general practice.ppt
- funding in gp.ppt
- funding of gp - old vs new.doc
- individual funding requests.pdf
- minimum practice income guarantee MPIG.pdf
- old document - finances - by worcester vts.pdf
- old document - guide to maximising GP income.pdf
- practice finances in a nutshell.ppt
- tutorial on gp finance (TEACHING RESOURCE).doc
🌐 Web Resources
A hand-picked mix of official guidance and real-world GP finance resources. Because sometimes the best pearls are not hiding in the official documents.
Official hub for all GP contract guidance, annual changes and funding letters.
BMA's detailed breakdown of GMS contract, annual changes and negotiation updates.
Current DDRB recommended pay scales for salaried GPs across all four UK nations.
Everything about the Clinical Negligence Scheme for General Practice.
Up-to-date tiered contribution rates for GPs in the NHS pension scheme.
An accessible deep-dive into how GP practices are funded and contracted in England.
Plain-language guide to the most recent contract including QOF and ARRS changes.
A practising GP explains the financial landscape in plain, readable terms. One of the best.
Practical articles on practice finance, contracts and managing GP business finances.
Topic-by-topic coverage of practice accounts, tax, NHS pension, and partnership finances.
Free, doctor-led financial guidance specifically for locum GPs navigating self-employment.
A practice manager's breakdown of all income streams — clear, practical, up-to-date.
🩺 Why This Matters in GP
GP practices are not departments inside the NHS. They are independent businesses that contract with the NHS to deliver primary care services. This matters enormously. If an NHS hospital trust faces financial crisis, central NHS support mechanisms can intervene. If a GP practice runs out of money, it closes — and patients lose access to care. There is no equivalent safety net for general practice.
As a trainee, you will work inside a practice during ST1, ST2, and ST3. Understanding the financial pressures your practice faces helps you understand decision-making, workload patterns, and staffing choices that might otherwise seem puzzling. And as a future GP, your own career will be shaped directly by these financial structures.
- Your training practice depends on NHS income to survive just like any small business
- Most GPs are not NHS employees — they are effectively small business owners
- The decision to go for partnership, salaried, or locum work has major long-term financial consequences
- Many IMGs arrive without knowing that UK GP income varies widely between practices and career pathways
- Financial awareness is a core part of professional practice — understanding how your workplace is funded helps you be a better colleague and advocate
Most doctors spend years mastering QRS complexes and drug interactions, and then become a GP partner with no idea how their income is actually calculated. This page is designed to fix that — or at least give you a fighting chance.
⚡ Quick Summary — If You Read Nothing Else
The panic-before-tutorial version. Key facts, clear and fast.
GMS (national, ~70% of practices), PMS (local), APMS (flexible, inc. non-GP providers). Most practices use GMS.
The main per-patient capitation payment. Calculated using the Carr-Hill formula. Covers essential services.
Quality and Outcomes Framework — voluntary performance payment. Points convert to cash at year end. Value ~£228/point (2026/27).
Primary Care Networks attract extra funding. ARRS reimburses staff salaries (pharmacists, physios, nurses, GPs). A major income source.
Partners share profits (and risks). Salaried GPs earn a fixed salary. Very different financial and legal positions.
A defined benefit (CARE) scheme. 2015 scheme for most. Contributions are tiered by earnings. A genuinely excellent benefit — don't opt out.
State-backed CNSGP covers NHS clinical negligence from April 2019. You still need MDO cover for private work, GMC hearings, etc.
Self-employed locums must register with HMRC, submit Self-Assessment, and handle pension via Locum Forms A & B. Get an accountant.
📋 GP Contract Types
Every practice holds one of three types of NHS contract. Understanding the differences helps you understand how your practice operates.
The NHS contracts with practices — not individual GPs — to deliver primary medical care services within a defined area. The contract type determines how flexibility, funding rules, and governance work.
| Contract | Who Uses It | Negotiated By | Key Features | Flexibility |
|---|---|---|---|---|
| GMS | ~70% of practices in England | NHS England & BMA GPC nationally | Standard national contract; consistent terms across England; income stability | Low — fixed national terms |
| PMS | ~25% of practices | ICB locally | Negotiated locally; can include enhanced local specifications; historically higher baseline funding in many areas | Medium — local variation possible |
| APMS | Non-GP organisations; some commercial providers | ICB locally | Allows non-GP organisations (companies, third sector) to run GP services; used for urgent care, walk-in services, new provision areas | High — bespoke terms |
The contract splits GP services into three tiers: Essential services (must be delivered — all core GP care), Additional services (e.g. contraception, vaccinations — can be opted out of), and Enhanced services (optional extras, paid additionally). Understanding this split is important for AKT.
💰 How Practices are Paid — Income Streams
A GP practice income is made up of several distinct streams. None of them is "just a salary." This is one of the most commonly misunderstood aspects of general practice.
Approximate income stream breakdown (typical English practice)
⚠️ Percentages are illustrative and approximate. Actual income varies significantly by list size, location, deprivation, and enhanced services taken on. For current data see NHS England Payments to General Practice (published annually at england.nhs.uk).
The Global Sum is the core payment that every GMS practice receives. It is a capitation payment — meaning it is calculated per registered patient, not per appointment. More patients means more income.
Not all patients are equal in funding terms. The Carr-Hill formula adjusts the per-patient payment based on:
- Patient age and sex (older patients need more care)
- Patient morbidity (sicker populations cost more)
- Rurality (remote practices have higher costs per consultation)
- List turnover (practices with high patient movement cost more to administer)
Important limitation: The current formula does not include deprivation weighting or English as a second language — a long-standing criticism, especially for urban inner-city practices serving highly deprived communities.
- Global sum per weighted patient: approximately £123.34 in 2025/26 (up from £112.50 in 2024/25)
- OOH deduction remains at 4.75% (practices that opt out of out-of-hours have this deducted)
- The 2025/26 contract saw the biggest global sum increase in over a decade — £889 million total investment increase
QOF is a voluntary performance-linked payment scheme. Practices earn points by meeting clinical indicators — e.g. achieving good blood pressure control in hypertensive patients, or diabetes review completion rates. Points convert to cash at year end.
| QOF Element | 2025/26 | 2026/27 |
|---|---|---|
| Value per QOF point (national) | £220.62 | ~£227.95 |
| Maximum achievable points | 564 points | 582 points |
| Aspiration payment (paid monthly) | Based on expected achievement | Same |
| Achievement payment | Paid at year end | Same |
| Minimum points before deduction risk | N/A (voluntary) | 150 points |
| Permanently retired indicators | 212 points retired (2024/25 income protected) | — |
- Critics argue QOF rewards box-ticking over holistic care
- Practices with sicker populations can struggle to hit thresholds despite genuine effort
- The 2026/27 contract introduced an improvement threshold — practices can now earn points by showing improvement against their own baseline, not just by hitting fixed targets. This especially helps practices in deprived areas.
- The BMA and RCGP have been pushing for simpler, more clinician-led quality improvement — watch this space
Enhanced services are paid in addition to the core contract. Practices choose which ones to take on based on capacity and interest.
- Immunisations & vaccinations (Item of Service fees — e.g. £12.06 per routine childhood vaccine dose in 2025/26)
- Learning disability annual health checks
- Network Contract DES (PCN participation)
- Minor surgery (selected practices)
- Wound care and dressings clinics
- ECG services
- Contraception services
- Phlebotomy beyond core contract
- Substance misuse (shared care)
- Minor illness services
Local enhanced services vary enormously between ICBs. Two practices in neighbouring areas can have very different enhanced service income. Good relationships with commissioners — and a proactive practice manager — can make a real difference here. Don't assume your practice has everything available that another practice in the next town has.
Primary Care Networks (PCNs) were introduced in 2019. They are groups of practices covering approximately 30,000–50,000 patients that come together to deliver services and access additional funding.
ARRS reimburses PCNs for employing a wide range of clinical roles. In 2025/26 this expanded significantly:
- Roles include: clinical pharmacists, first contact physiotherapists, paramedics, occupational therapists, mental health practitioners, social prescribing link workers, care coordinators, dietitians, podiatrists
- GPs in ARRS were added in 2024 — PCNs can now fund GPs via ARRS (within 2 years of CCT date, up to £82,418 + on-costs in 2025/26)
- Practice nurses were added to ARRS in 2025/26
- 2026/27: restriction to recently qualified GPs removed — any GP can now be ARRS-funded
- CASP (Capacity and Access Support Payment): Unconditional payment to PCNs — £204 million in 2025/26
- CAIP (Capacity and Access Improvement Payment): Conditional on implementing modern general practice model — worth up to £87.6 million in 2025/26
- 2026/27 change: CAP abolished; replaced by a new practice-level GP Reimbursement Scheme (£292m) going directly to individual practices to fund GP recruitment and same-day access
- If leasing: rent is generally reimbursed in full in arrears by the ICB
- If owning: mortgage payments are reimbursed (subject to rules)
- Sub-letting rooms generates additional income — but is governed by rules about permitted use
- Locum allowances (sick leave, maternity, study leave cover)
- Prolonged study leave payments (reimbursed via SFE)
- Sickness allowance reimbursements
- GP Retainer Scheme payments (for GPs working limited sessions to remain in practice)
Practices can also earn income from private medical reports, insurance reports, cremation forms, and private GP appointments. This additional income has grown in importance as NHS income pressures increase. However, it raises legitimate ethical considerations about equity of access to medical services. Partners typically benefit from this income; salaried GPs should check their contract regarding any entitlement to a share.
🏥 Practice Costs — Where the Money Goes
Income is only half the story. Practices have significant running costs — and after these are paid, partners receive whatever profit remains.
The practice money flow
Global sum, QOF, enhanced services, PCN payments, premises reimbursement
Largest single cost: salaries, NI contributions, employer pension contributions for nurses, admin, HCAs, salaried GPs
Premises (rent/mortgage), utilities, IT/clinical systems, medical supplies, equipment, accountancy, insurance
What remains after all costs is split between partners according to the partnership agreement. This is their "income" — and it also covers their own pension, tax, GMC, indemnity, and subscriptions.
Main practice costs
| Cost Category | Notes |
|---|---|
| Staff wages & NI | Usually the biggest single cost (nurses, HCAs, admin, receptionists, managers) |
| Employer pension contributions | 23.68% total; practices pay 14.38% directly, 9.30% funded centrally by government |
| Premises | Rent or mortgage (often reimbursed), utilities, cleaning, maintenance |
| IT & clinical systems | EMIS/SystmOne licenses, broadband, telephony, cybersecurity |
| Medical supplies | Consumables, vaccines, equipment |
| Accountancy & legal | Practice accountant, partnership legal costs |
| Salaried GPs' salaries | Based on DDRB recommended ranges |
| Locum costs | Cover for absent partners/staff |
For several years, practice costs (especially staff wages, energy bills, and minimum wage rises) grew faster than the NHS contract uplift. When inflation was 10%+ but the contract uplift was 1.9%, practices were effectively losing money in real terms every year. This is why so many practices struggled — and why the 2025/26 contract deal was seen as important progress.
🧠 Memory Aid — Practice Income at a Glance
The "GQEPA" Framework — All GP Practice Income Sources
Think: G-Q-E-P-A — "Good Quality Enhanced Practice Always" 😄
🤝 GP Partner vs Salaried GP — Financial Comparison
One of the most consequential career decisions you will make. The financial implications are significant and long-lasting.
| Factor | GP Partner | Salaried GP | Locum GP |
|---|---|---|---|
| Income type | Share of practice profit | Fixed salary (DDRB range) | Day rate / sessional fee |
| Income stability | Variable — rises and falls with practice finances | Stable and predictable | Variable — depends on bookings |
| Financial risk | High — personally liable for practice debts | None | Low (but no sick pay/holiday) |
| Earning potential | Higher long-term if practice thrives | Capped by DDRB range | Often highest day rate |
| NHS pension | Type 1 Practitioner — complex but comprehensive | Type 2 — administered by employer | Locum Forms A & B — self-administered |
| Sick pay | SFE locum reimbursement may cover locum costs during absence (eligibility rules apply — check Statement of Financial Entitlements); no personal sick pay | NHS contractual sick pay (up to 6 months full pay + 6 months half pay, based on continuous service) | None — income protection insurance strongly recommended |
| Maternity/parental leave | SFE locum reimbursement scheme for maternity leave cover (subject to eligibility) | NHS contractual maternity/parental entitlement | No contractual entitlement; Maternity Allowance (self-employed) may apply if NI contributions qualify — seek specialist advice |
| Holiday pay | Informal — built into profit share | Contractual — BMA model contract: 30 days + 10 bank/statutory days | None — statutory holiday pay entitlement may apply in some arrangements; get legal advice |
| Buy-in required? | Often yes — goodwill payment (now increasingly rare) or premises stake | No | No |
| Tax & admin | Self-Assessment tax return required | PAYE — simpler | Self-Assessment required |
Historically, GP partners earned considerably more than salaried GPs. The financial and organisational pressures of recent years (under-funded contracts, rising costs, CQC demands, workforce challenges) have made partnership less attractive to many newly qualified GPs. The proportion of GPs choosing salaried or portfolio careers has risen significantly. There is no objectively "right" answer — but you should go in with your eyes open.
Many IMGs are unfamiliar with the concept of a doctor being a business owner. In the UK, GP partners are legally self-employed small business owners. They can personally lose money if the practice fails. This is very different to most hospital medicine roles, and very different to GP structures in many other countries where GPs are government employees. It is worth understanding this difference carefully before making career choices.
💼 Personal Finance for GPs — The Practical Stuff
Medical schools teach pharmacology. They don't teach self-assessment tax returns. This section fills the gap.
- All self-employed GP locums
- All GP partners (as self-employed/professional)
- Salaried GPs with additional income above PAYE (e.g. locum sessions, rental income)
- Anyone earning over £100,000/year (tapering of personal allowance)
- Anyone with other untaxed income (rental, dividends, bank interest)
- Tax year: 6 April → 5 April
- Register as self-employed: by 5 October after first self-employment year
- Online Self-Assessment filing deadline: 31 January following the tax year end
- Payment of tax: 31 January (balance + 1st payment on account) + 31 July (2nd payment on account)
- Payments on account: HMRC asks for two advance payments towards next year's tax bill — a nasty surprise if you're not expecting it. Budget for it from day one.
In your first Self-Assessment, HMRC will ask you to pay your current year's tax plus 50% of it again as an advance payment towards next year. This can mean a bill of 150% of your expected tax in one go. Plan for this from the start. A specialist GP accountant can advise on the right amount for your specific circumstances. As a general guide, many locum GPs set aside 25–35% of gross income for tax, but the right figure depends on your earnings, pension contributions, and allowable expenses.
Self-employed GPs and locums can claim business expenses against their income, which reduces their taxable profit. Expenses must be wholly and exclusively incurred for business purposes.
Typically allowable expenses include:
- GMC annual retention fee
- MDO/indemnity subscriptions
- BMA membership
- RCGP membership and exam fees
- CPD courses and conferences
- Medical journals and textbooks
- Work-related telephone and internet costs (business proportion)
- Medical equipment and stethoscope
- Locum agency fees
- Accountancy fees
- Work clothing (e.g. scrubs — not everyday clothes)
Travel expenses:
- HMRC approved mileage rate for cars: 45p/mile for first 10,000 business miles per tax year; 25p/mile thereafter. Always verify current HMRC rates as these can change.
- Travel from your home to a client/practice where you do not have a fixed base is usually claimable
- Keep a mileage log — HMRC will ask for it
Get a specialist GP/medical accountant. The NHS pension rules, locum form administration, and GP-specific expense rules are complex. A general high-street accountant may miss legitimate deductions or make costly errors. Medics Money and AISMA (Association of Independent Specialist Medical Accountants) are good starting points.
- Stay in the NHS pension — it is one of the best defined-benefit schemes in the country. Opt out only with expert financial advice.
- Open a dedicated savings account and set aside an appropriate proportion of locum income for tax from day one — a specialist GP accountant can advise on the right amount for your situation (typically 25–35%, but varies widely)
- Register with HMRC as self-employed in your first year of locuming
- Keep all receipts and a mileage log throughout the year — it is much harder to reconstruct them later
- Get income protection insurance if you become a locum (no sick pay otherwise)
- Understand whether your contract includes a DDRB uplift clause (salaried GPs)
- Ask your practice manager to explain the pension arrangements for your role
- Not pensioning locum income because the admin looks complicated (Form A & B submission)
- Forgetting the 10-week deadline for pensioning locum work — work done more than 10 weeks ago cannot be pensioned
- Spending first-year locum income without setting aside for tax, then being hit with a large tax demand including payments on account
- Not claiming legitimate expenses, resulting in overpaying tax
- Opting out of the NHS pension "temporarily" and never opting back in
- Signing a partnership agreement without legal review of key clauses (restrictive covenants, capital obligations, profit share)
- Not understanding the difference between GMS/PMS contract implications before buying into a partnership
🧓 The NHS Pension Scheme — A Very Good Reason to Stay
The NHS pension is a defined benefit scheme — one of the best remaining pension structures in the UK. Understanding how it works is essential, especially for locums and newly qualified GPs.
Key features of the NHS Pension
- Defined benefit (CARE) — your pension is based on your career average earnings, not on investment performance. You will know roughly what you will get.
- 2015 Career Average Revalued Earnings (CARE) scheme — most GPs joining now are in this scheme
- Pension accrues at 1/54th of pensionable pay each year, revalued annually
- Normal pension age is 68 (2015 scheme) — linked to State Pension Age, which may be subject to future change
- Includes death in service benefits and ill health retirement. In the 2015 scheme there is no automatic tax-free lump sum on retirement, but members can commute part of their annual pension for a lump sum (subject to HMRC limits)
- Total employer contributions are 23.68% of pensionable pay. For locums, the practice pays 14.38% to the locum, who forwards it to PCSE. The remaining 9.30% is funded centrally by the government.
- Despite the complexity, it remains exceptional value — don't opt out without serious specialist financial advice
Tiered employee contributions (from April 2025)
Your contribution rate is based on your total pensionable earnings (annualised):
Source: BMA NHS Pension Contribution Rates guidance (England). Tiers applicable from 1 April 2025. Always verify current rates at bma.org.uk as these are reviewed periodically.
- Practice administers pension via annual estimate form submitted to PCSE
- Year-end: Type 1 self-assessment form
- Complex annualisation rules if not a full-year contract
- Pensionable pay = 100% of NHS GP practitioner earnings (private income is not pensionable)
- Practice deducts contributions at source via payroll
- Year-end: Type 2 self-assessment form required
- Contribution tier based on total income from all pensionable roles
- Relatively straightforward compared to locum administration
- Form A: completed for each engagement and sent with your invoice. Includes your fee and employer pension contribution.
- Form B: monthly summary sent to PCSE with payment of both employee AND employer contributions
- Pensionable pay = 90% of fee (10% treated as expenses)
- ⚠️ Work done more than 10 weeks ago cannot be pensioned — PCSE will reject late forms. Exceptions are extremely rare and must be applied for directly with PCSE. Do not rely on exceptions.
- Employer contribution from practice: 14.38% of pensionable pay — legally required
If you do not have a continuous Type 1 or Type 2 contract running from 1 April to 31 March, your pensionable pay is annualised — projected as if you earned that amount over a full year. This can push you into a higher contribution tier than your actual earnings would suggest, meaning you pay more into your pension than expected. Locum GPs are most affected. Use the NHS Pensions annualisation calculator each year, or ask an accountant familiar with GP pensions.
🛡️ GP Indemnity — What Covers You?
This is one of the most misunderstood areas for both trainees and newly qualified GPs. The short version: NHS covers you for clinical negligence, but not for everything else.
The Clinical Negligence Scheme for General Practice (CNSGP) provides state-backed cover. It is automatic — you do not need to register or pay separately. It covers:
- All NHS-commissioned clinical work (GMS, PMS, APMS)
- Out-of-hours work (if NHS commissioned)
- GP partners, salaried GPs, locums, nurses, and other practice staff
- Only covers incidents from 1 April 2019 onwards
- Note for GP trainees (registrars): In England, GP registrars are covered by NHSE-arranged indemnity (formerly via HEE) for their training placements — this is separate from CNSGP. In Northern Ireland, trainees arrange their own MDO cover and claim reimbursement from NIMDTA.
- Private work (you must arrange your own cover)
- Inquest proceedings
- GMC / regulatory hearings
- Employment and contractual disputes
- Non-clinical liabilities
Even with CNSGP in place, most GPs still maintain membership of an MDO (MDU, MPS, MDDUS). This covers the important gaps:
- GMC hearings and regulatory support — arguably the most important
- Inquest representation
- Employment disputes
- Medico-legal advice line (24/7)
- Private clinical work
- Complaints handling support
- Pre-1 April 2019 "tail" liabilities (handled via ELSGP)
MDO membership is a professional essential, not an optional extra. Choose MDU, MPS, or MDDUS — all reputable. Costs vary; shop around when newly qualified.
In England, NHS England (which absorbed HEE's functions in 2023) arranges comprehensive personal indemnity cover for GP trainees throughout their training — including GP placements and hospital posts. You do not pay for this. It covers GMC hearings, regulatory proceedings, and private work done under supervision. In Northern Ireland, trainees arrange their own MDO cover and can claim reimbursement from NIMDTA. Always confirm current arrangements with your Training Programme Director, as indemnity arrangements can change.
💎 Insider Pearls — What Nobody Tells You
Many trainees discover that newly qualified GPs are now reluctant to take on partnerships — not because they don't want responsibility, but because they've watched the financial and organisational pressures up close during training. Going salaried first for 2–3 years to understand how practices run before committing to partnership is increasingly common — and probably wise.
IMGs sometimes ask whether it's worth contributing to the NHS pension if they don't plan to spend their whole career in the UK. The answer depends on length of stay. Even for shorter stays, you may be able to claim a refund of contributions (after leaving UK NHS) or transfer to another scheme. Get specialist advice — don't just opt out as a default.
You don't need to understand every detail of practice finances to be a good GP. But having a rough understanding means you'll understand why your trainer is stressed about QOF points in March, why the practice is recruiting ARRS staff rather than salaried GPs, and why your practice manager cares about list size. Context transforms your understanding of the environment you're in.
🗣️ Voices from the Field — Real Insights from GPs & Educators
The stuff that gets shared at half-day release, in WhatsApp groups, and over coffee with your trainer. Distilled, verified, and written up properly.
This section brings together recurring themes from UK GP training communities — discussions on GP finance forums, specialist GP accountancy resources, deanery guidance, and the wisdom shared by UK GP educators and newly qualified doctors. Everything here has been cross-checked against BMA, RCGP, and HMRC guidance. Nothing here conflicts with official advice. Think of it as the conversation your trainer wished they had time to have with you.
When newly qualified GPs talk about their career decisions, certain themes keep coming up again and again. Here is what the community consistently says — presented as honest, practical insight.
This is repeated constantly by GPs who rushed into partnership straight from training. Being salaried first lets you see how other practices work, understand the business from the inside without personal financial risk, and make a more informed decision later. Many GPs who went salaried first say they wish they had done it sooner. It is not the slow option — it is the smart option.
A period of locuming after CCT is increasingly common — and for good reason. It helps you compare different practice cultures, find what suits you, build confidence as an independent practitioner, and command a higher day rate while exploring. The trade-off: no sick pay, no holiday pay, pension admin is entirely your own responsibility, and isolation can be a real problem. If you locum, consider joining a chambers model like NASGP for community and support.
This comes up more than almost anything else. Partnership agreements are legal contracts, and trainees who signed without fully understanding the terms sometimes found themselves locked into restrictive clauses — including post-exit restrictive covenants (restrictions on where you can work after leaving), unexpected capital obligations, or staged parity arrangements that felt unfair in practice. Always have the agreement reviewed by a solicitor who knows GP partnerships before you sign. The cost is small compared to the risk.
When joining a partnership, ask to see the practice accounts — not just the headline profit figure, but the full picture including liabilities, premises costs, and NHS debt position. A practice with an attractive income on paper may carry significant financial obligations. Londonwide LMCs and other deanery-linked organisations offer partnership readiness programmes specifically because this catches people out. A specialist GP accountant can review the accounts and flag concerns before you commit.
This catches locum GPs constantly. Locum work done more than 10 weeks ago simply cannot be pensioned — the PCSE system will reject the form. There are no exceptions. Build a habit of submitting Form A with every invoice and Form B by the 7th of the following month. Missing a month means losing that pension contribution permanently.
Deanery-linked GP guidance for newly qualified doctors is explicit about this: PCSE does not have a strong track record of reliably storing pension records. Keep a personal copy of every payslip, every Form A and B submission, and every Type 1 or 2 form you submit. If records are ever lost, the burden of proof can fall on you. A simple folder — digital or physical — can save enormous stress years later.
Higher-earning GP partners can find that their pension grows faster than the annual allowance permits. This creates an unexpected tax charge. The annual allowance is £60,000 per year. For those with adjusted income over £260,000, it tapers down to as little as £10,000. The Lifetime Allowance was abolished in April 2024, but the annual allowance remains. If your earnings are rising fast, get specialist advice before the tax year ends — not after.
Several GP community discussions highlight the value of locum management software — apps like LocumDeck (NASGP) and Locum Organiser that auto-populate Forms A and B from your diary, generate correct invoices, and calculate pension contributions. The time saving is real. The admin for pension forms is the main reason many locums fall behind. A small monthly subscription cost is worth paying.
This is mentioned repeatedly by newly self-employed GPs. On your first Self-Assessment, HMRC not only collects the tax for year one — it also asks for 50% of that amount as an advance payment (first payment on account) towards year two's bill. In January, you can owe 150% of what you expected. Then in July, another 50% is due. The total in year one can feel enormous. The fix: set aside a proportion of every payment into a dedicated savings account as soon as it arrives — a specialist accountant will advise the right percentage for your earnings (commonly 25–35%, but it depends on your individual circumstances). Do not treat this money as yours to spend.
Many GPs — especially those from countries where tax returns are simpler — underestimate how many legitimate expenses reduce their taxable income. GMC fees, MDO membership, BMA subscription, RCGP membership and exam fees, CPD courses, study materials, mileage for visits, a proportion of your phone bill — all are claimable if genuinely business-related. This is money back in your pocket. An accountant familiar with GP finances typically saves more than their fee in the first year.
The idea of locuming through a limited company to save tax sounds attractive — and is widely discussed in GP forums. But there are significant reasons to be cautious: locum income earned through a limited company is not pensionable under the NHS scheme. You lose a very valuable benefit. Corporation tax changes in recent years have also reduced the tax advantage considerably. IR35 rules can also apply, making the status complex. Most GP accountants recommend that solo locum GPs stay as sole traders unless their circumstances are unusual. Always take specialist advice before setting up a company.
This comes up constantly in GP financial discussions. General accountants often miss GP-specific considerations: NHS pension rules, locum form administration, Carr-Hill adjustments for partner accounts, practice profit allocation, and basis period reform. Specialist GP accountants (check AISMA — Association of Independent Specialist Medical Accountants, or ask Medics Money) understand this world. The cost of the accountant is itself a tax-deductible expense.
Salaried GP contracts vary enormously between practices — even within the same town. Unlike GP trainee contracts (which are nationally standardised), salaried GP employment terms are negotiated practice by practice. Many newly qualified GPs sign without realising what they are agreeing to.
✅ The Salaried GP Contract Checklist
Pay & Hours
- What is the salary? (Check it against BMA recommended range)
- Does the contract include a DDRB uplift clause for annual increases?
- How many sessions per week? (1 session = 4hrs 10min; full-time = 9 sessions)
- Is additional work (home visits, admin) included or extra?
- What happens if you exceed contracted hours — TOIL or extra pay?
Leave & Benefits
- Annual leave entitlement: BMA model contract is 30 days + 10 bank/statutory days (for those with 5+ years NHS service) or 25 days + 10 days (under 5 years NHS service)
- Paid study leave / CPD time: standard is 1 in 9 sessions (roughly 4 hrs/week)
- Sick pay provisions — these should match NHS continuous service terms
- Maternity/paternity leave — check what applies
- Is continuous NHS service recognised? (It should be — affects sick pay entitlements)
Protection
- Is indemnity fully covered by CNSGP + employer MDO? (Check what private/non-NHS work requires)
- Notice period — both ways
- Any restrictive covenants post-exit? (How many miles, how long?)
- Any requirement to do out-of-hours work?
Pension
- Pension administered via practice (Type 2): total employer contribution is 23.68%; the practice pays 14.38% directly (the remainder is funded centrally)
- Any additional income streams (private reports, enhanced services) — is pension deducted from these too?
- If salary is below the DDRB recommended range, raise this before signing
This surprises many GPs coming from hospital jobs where Agenda for Change pay scales mean automatic incremental increases. Once you are a salaried GP, there are no automatic pay rises unless your contract includes a DDRB uplift clause. The BMA model salaried GP contract includes this clause — but not all contracts are the BMA model contract. If yours doesn't mention annual uplifts, you may stay on the same salary indefinitely. Check before signing; ask for it to be added if it is absent.
Mortgage Planning
Many lenders misunderstand GP income — especially for partners (whose income shows as "profits" rather than salary) and locums (variable self-employment). Use a mortgage broker who specialises in medical professionals. Several high street lenders offer GP-friendly products once you have 2 years of accounts.
Income Protection
Locum GPs have no sick pay. Salaried GPs have contractual sick pay — but only up to a limit (usually 6 months full, 6 months half). Income protection insurance covers your income if you cannot work through illness or injury. It is especially important for locums and newly qualified partners with financial commitments.
ISAs & Savings
The NHS pension is excellent — but relying on it entirely as your only financial planning is risky. Annual ISA allowances (£20,000), Lifetime ISAs for first-time buyers, and diversified savings give you flexibility that the pension alone cannot. Start early, even small amounts.
The Medics Money podcast (by Dr Tommy Perkins and Dr Ed Cantelo — a GP and Chartered Accountant) is widely recommended in GP training communities for making financial literacy genuinely accessible to doctors. It covers everything from ISAs and tax codes to NHS pension traps and partnership finance — in language that actually makes sense. It is free. Listen to a few episodes before you qualify, not after you have already made an expensive mistake. Their guides are also available free on their website.
The Cameron Fund is a charity for GPs in financial hardship. It helps current, retired, and former GPs who have worked in NHS general practice for at least one year, as well as their dependants. It also provides interest-free loans to GP registrars in financial hardship for AKT and SCA exam fees. Not many trainees know it exists. If you or someone you know is struggling financially, this is worth knowing about.
The biggest theme from GP financial communities is simple: doctors receive no financial education at medical school, and most discover they needed it the hard way — after making expensive mistakes. The smartest thing a GP trainee can do is read one article about tax, one about the NHS pension, and one about career options in the year before they qualify. Not to become an expert — just to know enough to ask the right questions when the time comes.
Many IMGs arrive in the UK having worked in healthcare systems where doctors are employed directly by the government or state, where there is no concept of a "practice profit," and where taxes are handled entirely by the employer. UK general practice is different in ways that can be genuinely surprising.
🇬🇧 UK GP Practice Model
- GP practices are independent businesses contracted by NHS
- Partners are self-employed business owners, not NHS employees
- Partners personally share in both profits and losses
- Income comes from multiple NHS payment streams — not one salary
- Partners must file Self-Assessment tax returns annually
- Salaried GPs are employed by the practice — not directly by the NHS
- Pension is a defined benefit (CARE) scheme — not like a typical pension fund
- Indemnity is state-backed for NHS work since 2019
🌍 Many Other Country Models
- Doctors are often direct government employees
- Single salary — not multiple income streams
- Tax is fully handled by employer via payroll
- No concept of "practice profit" to share
- No personal financial liability for the practice
- No concept of GP "partnership agreement"
- State pension, not a separately managed defined-benefit scheme
- Indemnity often managed centrally by employer or state
- That becoming a GP partner means taking on personal financial liability — if the practice owes money, that can include you personally
- That the NHS pension is a very good benefit by international standards — staying in it (and administering it correctly) is almost always better than opting out
- That UK tax operates on a self-declaration system — HMRC will not always remind you or do it for you; as a self-employed locum or partner, the responsibility is entirely yours
- That QOF is not a bonus — it is a core planned income stream that practices budget around; poor QOF performance affects the whole team and the practice finances
- That "salaried GP" in the UK does not mean the same security as being a government employee in many other countries — salaried GPs are employed by the practice itself, not the NHS, and their job security depends on the practice's financial health
- Register with HMRC as soon as you start any self-employment (locum) work — within the first few months, certainly by 5 October
- Check you are on the NHS Performers List before you start seeing patients
- Set up a dedicated bank account for work income and expenses — keeping them separate from personal finances makes tax returns much simpler
- Ask your trainer or TPD to recommend a GP accountant in your area — one with experience of GP finances specifically
- Read the BMA's salaried GP handbook before accepting a salaried post — it sets out your minimum rights
👩🏫 For Trainers — Teaching Finance to Trainees
Common trainee blind spots
- Many trainees believe GP practices are fully funded like hospital departments — they don't realise the practice is a business at financial risk
- IMGs may have no concept of capitation payment or practice-owned employment — most come from countries where GPs are government employees
- Most trainees don't know the difference between GMS, PMS, and APMS contracts
- Very few trainees understand how QOF actually works until someone walks them through it
- Almost no trainees understand locum pension administration until they need it
- The "payments on account" trap is almost universal among first-year locums
Tutorial ideas & discussion questions
- Ask your trainee: "If our practice had £100 of income — where does it come from, and where does it go?" Use it to map the full income and cost picture together.
- Review last year's practice QOF achievement together — what did well, what underperformed, and why?
- Walk through a practice expenses sheet — even a simplified version helps context
- Ask: "What would you choose — partner, salaried, or locum? Why?" Use it to explore priorities and values.
- Discuss the trade-offs of ARRS: does employing a pharmacist instead of a GP improve or worsen care for your specific population?
- Give a mock "tax planning for a locum GP" scenario and let the trainee work through it
🔥 AKT High-Yield — NHS & GP Finance
These are the financial facts that have appeared — or are most likely to appear — in AKT questions. Learn them. Every single one.
The Global Sum is the main capitation payment per registered patient. It is adjusted using the Carr-Hill formula, which accounts for age, sex, morbidity, rurality, and list turnover. Critically, it does not include a deprivation weighting — a common AKT trap. The 2025/26 per-weighted-patient value is approximately £123.34.
QOF is a voluntary opt-in scheme — practices choose to participate. However, from 2026/27, practices achieving fewer than 150 points face a deduction from the Global Sum. A QOF point was worth £220.62 in 2025/26 and approximately £227.95 in 2026/27. Aspiration payments are paid monthly; achievement payments at year end. 212 QOF points (32 indicators) were permanently retired in 2025/26. Watch for questions asking whether QOF is compulsory — it is not; but opting in is near-universal and non-participation has financial consequences.
GMS is the national standard contract negotiated by NHS England and BMA GPC — approximately 70% of practices. PMS is locally negotiated with the ICB. APMS allows non-GP organisations (including private companies) to provide primary care. AKT commonly tests the difference between these three and their relative flexibility.
ARRS reimburses PCNs for employing specific clinical roles. In 2024, GPs were added to ARRS for the first time (recently qualified, within 2 years of CCT date). Practice nurses added in 2025/26. In 2026/27, restriction to recently qualified GPs was removed. AKT may test which roles are included, and who funds ARRS (NHS England via ICBs).
The Clinical Negligence Scheme for General Practice (CNSGP) was introduced in England in April 2019. It is state-backed and covers NHS clinical work. It does not cover private work, GMC hearings, or employment disputes. Existing Liabilities Scheme for General Practice (ELSGP) covers incidents before April 2019. AKT commonly tests the scope of CNSGP coverage.
Routine childhood vaccinations attract an Item of Service fee. In 2025/26 this was increased to £12.06 per dose for Table 1 vaccines (up from £10.06). Enhanced services for immunisations are a significant income stream. Practices do not need to complete QOF indicators to receive IoS vaccination fees.
Locum GPs pension their NHS income via Locum Form A (per session, with each invoice) and Locum Form B (monthly summary with payment to PCSE). Pensionable pay = 90% of fee (10% is treated as expenses). Deadline: 10 weeks after the work is done. After that it cannot be pensioned. Employer contribution from practice: 14.38% of pensionable pay — legally required even for freelance locums.
Essential services = must be delivered (core GP care, including basic immunisations). Additional services = can be opted out of with ICB agreement (e.g. cervical screening, contraceptive services, child health surveillance, minor surgery). Enhanced services = optional, separately funded extras (e.g. learning disability annual health checks, extended hours). AKT frequently tests which category specific services fall into. Note: minor surgery is an additional service (not enhanced); learning disability annual health checks are a Directed Enhanced Service (DES).
Practices that opt out of out-of-hours (OOH) responsibility have a deduction of 4.75% from the Global Sum. The majority of practices opt out of OOH. Those that remain opted in must provide 24/7 cover for their registered patients. This is rare in modern general practice.
The NHS pension uses tiered employee contributions based on total annualised pensionable earnings. The highest tier (earnings over ~£62,925) attracts a 12.5% employee contribution. The employer contribution is 23.7%. Both figures are AKT-testable. The 2015 CARE scheme accrues at 1/54th of pensionable pay per year.
❓ Frequently Asked Questions
Q: Is QOF compulsory?
No. QOF is a voluntary scheme that practices can opt into. However, the vast majority do, because it represents a significant income stream. Practices that score fewer than 150 points (from 2026/27) may face a small deduction from the Global Sum, but opting in and achieving well is the norm.
Q: If I become a salaried GP, do I automatically get the DDRB pay uplift each year?
Only if your contract includes an uplift clause that references the DDRB recommendation. The BMA model salaried GP contract does include this clause. Check your own contract. If it doesn't include it, you're not automatically entitled to the uplift — though your employer is strongly encouraged to pass it on. If yours doesn't, raise it with your employer and consult the BMA.
Q: What happens to my pension if I leave the UK?
Your accrued NHS pension benefits do not disappear. Options may include: leaving benefits deferred (to be accessed at pension age), applying for a refund of your own employee contributions only (available if you have fewer than 2 years' qualifying membership, subject to tax deductions), or transferring to a QROPS-approved overseas scheme (subject to HMRC rules and potential tax charges). The rules are complex and subject to change. Always get specialist NHS pension and financial advice before leaving the UK.
Q: Do I need an MDO if CNSGP covers clinical negligence?
Yes — for most GPs. CNSGP only covers NHS clinical negligence. You still need MDO coverage for GMC hearings, regulatory proceedings, employment disputes, private work, and inquest support. MDO membership provides a 24/7 medico-legal helpline, which is independently valuable regardless of your risk level.
Q: What is the DDRB?
The Doctors' and Dentists' Remuneration Review Body is an independent body that makes annual recommendations to the government about GP pay. For contractors (partners), the DDRB recommendation typically translates into a Global Sum uplift. For salaried GPs, it sets the recommended pay range. The government does not always fully implement DDRB recommendations. Under the 2019–2024 five-year contract deal, separate negotiated uplifts applied to contractors rather than annual DDRB recommendations; since then, DDRB recommendations have resumed for both contractors and salaried GPs.
Q: Can I do locum work as a GP trainee?
Yes, but with important caveats. Any work outside your training programme must comply with your training conditions and ARCP requirements. The GMC requires doctors to take responsibility for safe working hours and to declare any outside employment where relevant. You must have appropriate indemnity for any additional work — your standard training indemnity covers your training posts only, not unsupervised additional sessions. Always get explicit agreement from your Training Programme Director before taking on extra work, and ensure it does not compromise your training commitments or working hours.
Q: What's the difference between a Directed and Local Enhanced Service?
Directed Enhanced Services (DES) are specified nationally by NHS England — all practices in England can access the same ones under the same terms (e.g. learning disability health checks, PCN DES). Local Enhanced Services (LES) are commissioned locally by ICBs and vary between areas. Two practices in different parts of England can have very different LES income as a result.
✅ Final Take-Home Points
- GP practices are independent NHS-contracted businesses — not NHS departments. If the finances fail, the practice closes.
- Income comes from five main streams: Global Sum, QOF, Enhanced Services, PCN/ARRS funding, and premises/other. GQEPA — remember it.
- The Global Sum uses the Carr-Hill formula — adjusted per patient by age, morbidity, and rurality, but not by deprivation.
- QOF is voluntary, performance-linked, and worth roughly £220–228 per point. In 2025/26, 212 points were permanently retired and their funding moved elsewhere.
- ARRS is a major modern income source — funding pharmacists, physios, paramedics, and now GPs and nurses employed via PCNs.
- The CNSGP covers NHS clinical negligence for GPs since April 2019. You still need MDO membership for GMC hearings, private work, and employment disputes.
- The NHS pension is defined benefit and genuinely valuable. Don't opt out without expert financial advice.
- Locum GPs must submit Forms A & B within 10 weeks of work — miss the deadline, lose the pension for that work.
- Self-employed GPs must file a Self-Assessment tax return, set aside ~25–30% of income for tax, and budget for "payments on account" in year one.
- Financial awareness is an important professional skill for GPs. Understanding the business side of practice makes you a better partner, colleague, and advocate for your patients.
You need to get grips with money
Being a doctor doesn’t just mean you need to know your clinical stuff! Money is important too. The GP practice cannot run if it is failing as a business (yes, GP practices are businesses at the end of the day.
And similarly, you have to financially support yourself and take care of the people you love. It’s not all about work. It’s about your life too. So, don’t neglect this important aspect of your work and personal life.