As many GP practices are experiencing partner changes, planning for a smooth succession remains a central issue in the sector. There are a number of considerations that need to be addressed when a new partner joins, including informing the Local Area Team, signing a partnership agreement and maybe, if the partner has two years’ experience, applying for seniority.
Succession in GP practices only really succeeds optimally when it is prepared for.
As such, the below list sets out a number of a key action points that need to be considered:
- Ensure the new partner signs a partnership agreement before they join the partnership
- If the practice is VAT-registered, inform HMRC of any partner changes
- Consider the drawings level in accordance with the agreed profit share and confirm the term to parity
- Inform the Local Area Team of the new partner and confirm the estimated superannuable pay for the first period ending 31 March
- If the practice funds partners’ tax bills, agree when it will take over responsibility for the new partner
- Arrange payment of subscriptions and locum insurance if appropriate
- Confirm the amount and date of any current account contribution
- If relevant, agree a property valuation and confirm the amount and date of any buy-in. Discuss any title deed changes required with your solicitor
- Apply for seniority if the GP has been a partner for at least two years previously
- Ensure the partner is registered as self-employed with HMRC and is also paying Class 2 NIC
Succession planning in GP practices
Over the next five to ten years many GP practices will be transitioning to the next generation.
It is therefore vital that practices recognise the need for succession planning and determine over what time-frame the issue will arise. In this case, the old adage of ‘failing to plan is like planning to fail’ could never be more accurate.
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