GP private fees VAT and tax records: accountant checklist

The gp private fees money model

Private fees can include medical reports, insurance forms, occupational health, travel vaccinations, private letters, teaching, medico-legal work or non-clinical services. The VAT and tax position depends on what is supplied and why.

GP accounting is rarely just a normal sole-trader or limited-company workflow. NHS income, partnership profit shares, drawings, PCN funding, superannuation, premises and sessional income can all sit in different reports.

Examples where this gets messy

• Insurance reports are charged to a third party and mixed with patient medical services.
• Occupational health work is invoiced by the practice but performed by one GP.
• Travel vaccinations and certificates are posted to one private-income code.
• Private fees are paid personally to a partner but relate to practice resources.
• VAT registration is considered using net bank receipts rather than taxable turnover.

How to brief an accountant

Brief the accountant on what the private fee was for, who paid, who performed the work, where the money landed and whether the service was clinical care, report writing, occupational health or another supply.

A good brief should say what changed in the year, what is still uncertain, which deadlines are close, and which numbers are estimates. That saves the first call from becoming a vague price conversation and lets the accountant quote for the real work: bookkeeping cleanup, accounts, tax return, payroll, VAT, pension forms, management accounts or one-off advice.

Situation notes

• VAT treatment can depend on the purpose of the service.
• Private fee income may need allocating to the practice or an individual GP.
• Taxable turnover for VAT is not the same as profit.

These situations are exactly where generic accountancy pages become too shallow. The page should help you name the issue, collect evidence and ask the accountant a practical question rather than asking for a broad opinion.

A simple monthly workflow

For gp private fees, monthly discipline is usually more valuable than a long year-end cleanup. Start with the source report, not the bank feed. For this topic, that usually means checking private fee schedule by service type., invoices, receipts and payment records. and clinician allocation and profit-share policy. before the numbers are summarised. Then reconcile the report to money received or paid, label any deductions, and keep a short note for anything that looks unusual.

The note does not need to be polished. A useful note might say that a payment was a prior-month adjustment, a deduction was taken before the bank receipt, a partner's drawings changed from a certain date, a clinician moved practice, an invoice included equipment and installation, or a pension statement has not arrived yet. Those notes make the accountant's work faster because they explain why the bank movement and the tax figure may not match.

At year end, build one folder for source documents and one summary sheet. The source folder proves the figures; the summary sheet helps the accountant navigate them. If you only keep the summary, the accountant may still need to ask for the original documents. If you only keep the originals, the accountant may spend extra time rebuilding the story from scratch.

What a useful accountant answer looks like

A useful accountant answer should be more specific than "that should be fine". For gp private fees, ask for a short explanation of the treatment, the records relied on, the assumptions made and the items still uncertain. If the question affects VAT, payroll, pension, employment status, goodwill, capital allowances or partner profit share, ask whether the answer should be reviewed again before filing or before a transaction completes.

The best output is a decision trail. It might say which report was used as the gross income source, how deductions were treated, which costs were excluded, how a partner or associate figure was allocated, whether an official threshold or relief was checked, and what should be monitored next month. That decision trail is useful for the current return and for future years, because the same issue often returns with slightly different numbers.

Common mistakes

• Treating all private fees as automatically outside VAT.
• Recording only card receipts without invoices.
• Not deciding whether private work belongs to the partnership or the individual.
• Ignoring VAT threshold checks where taxable supplies grow.

The safer approach is to keep source reports and accountant notes together. If a number is later queried, you want to show how the figure moved from the original report into the accounts or tax return.

When to speak to an accountant

Speak to an accountant before the tax return or accounts deadline if the figures affect drawings, partner profit share, NHS pension records, payroll, VAT, premises, capital accounts or a change in role. Waiting until all reports are closed can make the cleanup more expensive.

Questions to ask an accountant

• Which private fee categories should be reviewed for VAT?
• Does this income belong to the practice or the individual GP?
• How should private fees affect partner profit shares?
• What records prove the service type?
• Does VAT taxable turnover need monitoring?
• Should invoices use separate codes by service type?

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