Jenny Stone, ACA
Ramsay Brown and Partners
Ramsay House
18 Vera Avenue
London
N21 1RB
Tel: 020 8370 7705
E-mail: Jenny@ramsaybrown.co.uk

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Historic record of the financial performance of the practice
Accounts will be prepared from the books & records the practice maintain throughout the year
Consist of Profit & Loss account & Balance Sheet
Profit & Loss – Record of practice income &
Expenses
Balance Sheet – Provides practice with a value of their assets and each partner’s share of those assets.
The accounts will include notes to support the profit and loss and balance sheet

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Purpose of accounts
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Calculate profits to declare to tax man
Useful tool in making financial decisions
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Calculating projection of drawings
Bank may require for lending purposes
Accounts will usually be prepared annually to the practice year end
Accounts will include comparative figures, this will be the results for the previous accounting period
Figures in brackets means they are deducted from another figure in the accounts

 GP practices have a contract with the PCT, this will be a GMS, PMS or APMS
 GMS Practices
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Receive a global sum payment calculated based on number of patients
MPIG Correction factor
Quality & Outcomes framework
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Enhanced Services
Seniority income to reward experience within NHS
Reimbursements of expenses e.g. Rent & Rates, drugs purchased
Other income from medical reports and other sources

 PMS Practices
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Locally negotiated contract
Can also include growth money towards cost of employing salaried GPs
Quality & Outcomes framework
Enhanced Services above those included in baseline
Seniority Income
Reimbursements similar to GMS practices
Other income similar to GMS practices

 Shows profitability of the practice
 GP & nurse partners are running a business and the object is to make a profit
 New partners thinking about joining will be interest in the profitability of the practice
 Profits need to be calculated for the tax man
 Profit of the practice is allocated between partners according to profit sharing ratios
 Profit sharing ratios are usually based on number of sessions worked

 Balance sheet shows snapshot of the practice assets and liabilities
 Two halves to the balance sheet – top half lists the assets & liabilities, the bottom half shows each partners ownership of those assets – both halves will equal
 Current accounts are very important as show the individual partners money left in the practice

 Need to be set at a realistic level, take into account expected lost income and/or increased expenses
 Drawings need to be reduced to take account of changes to superannuation from 1 st April
2008
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Employees superannuation increase
Earnings cap removed
 Review throughout the year, if practice is getting into cash flow difficulty may need to reduce

 Global Sum will increase by 2.2%, amount per patient increases from £54 to £56
 However, if practice in receipt of MPIG, the correction factor will be reduced by any increase in global sum and therefore will receive no increase
 QOF – Removal of 58 QOF points to be put into extended hours
 Enhanced Services – No inflation uplift

Increase Income
 No Inflationary Increase global sum & MPIG
 Increase practice list
 Practice Mergers
 No Inflation increase in QOF
 Aim to achieve maximum QOF points
 Ensure max enhanced services income and taking up new directed enhanced
 New Sources of non-nhs income

 Difficult to maximise income
 In addition need to control/reduce expenses
 Review all areas for potential savings
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Cheaper suppliers for telephone, gas, electricity
Keep an eye on stationery expenditure, costs can escalate
Review work carried out by staff
Review use of locums
Setting budgets for all areas of expenses for year, allows you to monitor and control expenses

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Superannuation based on GPs NHS pensionable profits
GPs to complete end of year certificate to declare profits
PCT make deductions each month based on an estimate of profits
Once certificate submitted, PCT will collect any shortfall or refund of superannuation
Ensure PCT deducting superannuation using up to date estimate of profits
GP and non GP partners responsible for both employees and employers superannuation

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Employee’s Contribution increased from 1 st April
2008 (2008/09)
Based on tiered contribution rate
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0 to £19,682 – 5%
£19,683 - £65,002 – 6.5%
£65,003 - £102,499 – 7.5%
£102,500 – 8.5%
Rate for 2008/09 will be based on pensionable pay for 2006/07
Earnings cap removed for ee & er contributions
Earnings cap will still apply to added years contract commenced before 1 st April 2008, for those GPs who were previously capped