The world of contracting as a GP or medical doctor can be quite daunting, especially if you’re just starting out. With so much to consider such as what taxes to register for, how to incorporate, or how to manage your monthly accounting, it’s important to have a solid understanding of the ins and outs of working as a contractor in the medical field.
In this comprehensive guide, we’ll cover everything from setting up your limited company to navigating tax planning and finding the right accountant. So, let’s get started!
Why contract as a GP or medical doctor?
Contracting as a GP or medical doctor offers numerous benefits, one of which is the potential for higher earnings – both through day rate negotiation and through utilising effective tax planning strategies available due to operating via a Limited company.
Another significant advantage of contracting as a GP is the flexibility it provides in regard to work-life balance. GP contractors and medical doctor contractors can choose the assignments they take on, allowing them to gain experience in a variety of medical settings and specialities. This flexibility extends to work-life balance, as contractors can often set their own schedules, enabling them to better manage their personal and professional lives. This level of autonomy and control can greatly enhance job satisfaction and overall well-being.
Getting started: Setting up Your Limited Company
When contracting as a GP, it’s essential to set up a limited company to ensure you’re working within the legal framework. Here’s what you need to know:
Choose a unique company name: Make sure your company name is distinctive, professionally appropriate for a medical doctor, and not already in use.
Register with Companies House: Register your limited company with the UK government’s Companies House – it’s important to note that your registered address goes onto the public register – so you may wish to use a third party service if you want to avoid disclosing your home address.
Get a business bank account: Open a business bank account to keep your personal and business finances separate; this gives you better clarity as the business owner as well as keeping HMRC and your accountant happy.
Hire a medical doctor or GP contractor accountant: Find an experienced contractor accountant who understands the medical field to manage your company’s finances. Not only are ESDG Accountancy an ICAEW registered firm but we also have vast experience in working with professional contractors.
For a more detailed step-by-step guide, check out our article on setting up a limited company.
Maximising your income: Tax Planning for GP Contractors and Medical Doctors
As a GP or medical doctor contractor, it’s crucial to stay on top of your taxes. Here are some essential tax planning tips:
Seek advice on VAT: Typically doctors and GPs who provide medical services are exempt from VAT but it is important to check this for your specific situation. If you are in scope of VAT you will need to register for VAT and charge VAT on your services.
Claim expenses: Make sure you’re claiming all the allowable expenses to reduce your taxable income. Your accountant will be able to advise here to ensure you are maximising it. Typical allowable expenses may include professional fees and subscriptions, insurance, travel expenses, medical equipment and accountancy or legal fees.
Optimum salary: Calculate (or have your accountant calculate!) the optimum salary you will draw as a limited company director to minimise your tax burden.
Dividends: Be aware of the dividend tax rates and plan your dividend payments accordingly, making use of the annual tax free allowance.n
Finding the Right Accountant
Partnering with a knowledgeable accountant is essential for contracting as a GP or medical doctor. Here are some tips for finding the perfect fit:
Experience: Look for an accountant with experience in dealing with GP contractors, medical doctors, and limited companies.
Services: Make sure the accountant offers a range of services, including tax planning services. It makes things a lot easier and often cheaper if you can avoid using multiple advisors for your Limited companies affairs.
Communication: Good communication is key. Choose an accountant who’s easy to reach and keeps you informed about your financial situation. You will want someone you are comfortable talking with and can explain complex matters to you in a clear and relatable manner.
Reviews: Check online Google reviews to see what others say about their experiences with the accountant.
FAQs
Q: Can I work as a medical doctor GP contractor through an agency?
A: Yes, you can work as a GP contractor through an agency. Many GP contractors find this to be a convenient way to find work and manage their contracts. You may work via an Umbrella agreement or need to set up your own Limited company depending on the arrangement.
Q: What’s the difference between contracting as a GP and being a locum GP?
A: While both roles involve providing medical services on a temporary basis, there are some key differences. Contracting as a medical doctor or GP typically means working through your own limited company, while locum GPs usually work as self-employed individuals. Tax planning and financial management can differ significantly between the two roles.
Q: Do I need professional indemnity insurance when contracting as a medical doctor or GP
A: Yes, it’s essential to have professional indemnity insurance when contracting as a GP. This type of insurance provides cover for any legal costs and compensation claims that may arise due to professional negligence.
Q: How can I find GP and medical doctor contracting opportunities?
A: There are various ways to find GP contracting opportunities, such as networking with colleagues, joining professional associations, searching online job boards, and registering with specialist medical recruitment agencies.
Next Steps
Contracting as a GP can be a rewarding and flexible career choice – with often greater financial benefits than being a salaried GP or medical doctor, but it’s important to approach it with a thorough understanding of the process and requirements. By setting up your limited company, staying on top of tax planning, and partnering with an experienced accountant, you’ll be well on your way to enjoying the benefits of working as a GP contractor.
And don’t forget to explore our other resources, like The Art of the Deal: Negotiating Your Contractor Day Rate and A Game Changer for Contractors: The Contractor Limited Company Accountant, to help you succeed in your new venture. Good luck!
