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Primary Care Networks – what next?

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Primary Care Networks – what next?

Now that Primary Care Networks (PCN) have been up and running for several months, I’m writing a series of blogs around this topic.

Part 1: The Clinical Director.

The role of the Clinical Director

In setting up the PCN, it should have been agreed who will employ the Clinical Director, or if they are to be treated as an employee at all.

Options for ‘employing’ a Clinical Director

There are various ways a Clinical Director can be employed; a contract of employment with the lead practice, or a joint contract of employment with all PCN practices, are just two of the methods.

If there’s a joint contract of employment, there’s a problem, as the GP cannot be an employee in their own practice.

Can a Clinical Director be self-employed?

If you look at the responsibility and accountability of the Clinical Director role, it doesn’t lend itself to a self-employed position. There may also be HMRC requirements for the Clinical Director role to be treated as an ‘office holder’ with PAYE and NIC deducted at source, even if they are invoicing on a self-employed basis.

Can I pay my income into a limited company?

As the Clinical Director is an individual appointed by the PCN we don’t feel that use of a limited company is viable.

You’d have to consider IR35 regulations in that, if you removed the limited company, what would the relationship look like between the Clinical Director and the PCN?

Is Clinical Director income pensionable?

Our view of the current guidance is that the income received by the Clinical Director would be pensionable, as it’s carried out as part of the core General Medical Services (GMS) contract. Therefore, if the role is carried out by a GP, the income would be treated as practitioner income and practitioners have to pension ALL sources of pensionable income. Although, pensioning the income could be problematic!

What if I don’t want to pension this income?

We believe the income would be pensionable in its nature, however, as a result of increasing tax charges on pension growth, many GPs are looking to limit pensionable pay. If the Clinical Director was employed by a federation, there’s a possibility that the employment could be treated as an ‘officer’ post as opposed to a ‘practitioner’ post, and so the income could be ring fenced and the GP could opt out of pensioning officer income.

VAT implications

There are many VAT considerations surrounding PCNs and the role of the Clinical Director is one of them.

Generally, services provided by GP practices are covered by a medical exemption if the service is for the purpose of the ‘maintenance, protection and restoration of health’.

If you look at some of the duties of the Clinical Director, such as strategic and directional leadership or developing and implementing local improvement plans, the role lends itself to more of a managerial service, which wouldn’t be covered under the medical exemption and so would be a vatable supply.

VAT legislation requires a business to register for VAT if its vatable supplies are more than £85,000. If the GP is invoicing under a self-employed basis, it’s unlikely they will breach this threshold and so wouldn’t need to register for VAT.

As funding increases, or if invoiced by a practice, then there could be more chance of the VAT registration threshold being breached, and if invoiced from a dispensing practice that’s already registered for VAT, then VAT would need to be charged on top of the services charged.

What to do next?

As you can see, there’s a lot to consider. We’d always recommend you speak to a specialist medical accountant.

If you’d like to have a free initial consultation to discuss your circumstances, please get in touch. Call 0330 024 0888 or email

Louise Dean

Part 2 coming soon: Accounting for PCNs


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Larking Gowen

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