Healthcare professionals
Most doctors did not train for ten years to spend evenings on tax returns. They trained to treat patients. But UK healthcare professionals run some of the most complex personal tax positions of any sector — NHS pension with annual allowance charges, multiple employments, locum income, private practice profits, McCloud remedy reassessments, the tapered allowance for high earners. None of it is straightforward, and the consequences of getting it wrong are real.
NDCA is an ACCA-regulated accountancy practice working with UK GPs, consultants, locum doctors, dentists, nurses, allied health professionals and private healthcare businesses, working primarily on Xero. We charge a fixed monthly fee so NHS pension awareness, annual allowance flagging, locum bookkeeping, private practice accounts and self assessment are handled every year — not panicked at after a deadline lands.
Contact us today for a free consultation to walk through your situation.
NHS pension — the part most accountants get wrong
The NHS pension is one of the most valuable parts of any clinician's overall reward. It is also one of the most complicated, and the source of most tax surprises in the sector. Three things drive the complexity: the annual allowance, the McCloud remedy rollback, and the tapered allowance for high earners.
Annual allowance — £60,000 with tapering
The annual allowance is the maximum your pension benefits can grow each year before a tax charge applies. The standard annual allowance is currently £60,000. Pension growth above this triggers a tax charge at your marginal rate.
NHS pension “growth” is not the contributions you pay in. It is the increase in the capital value of your future pension entitlement. For final salary scheme members, growth can be driven by a single high-earning year, a backdated pay award, or extra sessions — even where take-home pay has not significantly changed. For 2015 scheme members on the CARE basis, growth is driven by pensionable pay and inflationary revaluation.
The tapered annual allowance for high earners
If your “threshold income” exceeds £200,000 and your “adjusted income” exceeds £260,000, your annual allowance is tapered down — by £1 for every £2 of adjusted income above the £260,000 threshold, with a minimum tapered allowance of £10,000.
For high-earning consultants taking on extra sessions, private practice income, or moving into clinical leadership roles, the tapered allowance is where most of the tax surprises land. We flag the annual allowance position before year-end, model the impact of any decisions you’re weighing (extra sessions, additional pensionable pay, opting in or out), and coordinate with specialist NHS pension advisers on Scheme Pays elections where the technical work needs deeper expertise.
Lifetime allowance — abolished
The Lifetime Allowance was abolished from 6 April 2024 and replaced with a Lump Sum Allowance (LSA) of £268,275 and a Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100. For most clinicians, this removes one of the major historical pension tax pressures. We assess the new lump sum allowance position at retirement and apply any transitional protections.
Scheme Pays
If you owe an annual allowance charge of more than £2,000, you can elect for the NHS pension scheme to pay the charge directly, with a corresponding deduction from your pension benefits at retirement. The Scheme Pays election protects in-year cash flow but has long-term consequences on your pension benefits. We model both options before recommending one.
The McCloud remedy — what doctors need to do
The biggest correction to public service pensions in years. Following the McCloud judgment, from 1 October 2023 NHS pension service between 1 April 2015 and 31 March 2022 was rolled back from the 2015 scheme to the legacy 1995 or 2008 scheme. At retirement, affected members will be given a choice: keep the rolled-back legacy benefits, or transfer that seven-year period back to the 2015 scheme.
The remedy affects you if:
- You were a member of the NHS pension scheme on or before 31 March 2012, AND
- You had pensionable service between 1 April 2015 and 31 March 2022
Gifted products and PR — the rules that trip everyone up
This is the single biggest area of confusion in creator tax. The HMRC position is clear, even if it's uncomfortable.
Why it matters for your tax position
Rollback to the legacy scheme changes your pension input amount for each of the affected tax years (2015/16 through 2022/23). For some members, that means a refund of annual allowance charges paid in the past. For a smaller number, it means additional tax to pay. The vast majority of affected members are likely to receive refunds — often running into thousands of pounds — but only if they claim.
Remedial Pension Savings Statements (RPSS)
NHS Pensions is issuing RPSS in phases to affected members. The RPSS contains the revised pension input amounts you need to reassess your annual allowance position. Once received, you have:
- 3 months to submit any required reassessment to HMRC via the dedicated digital service
- Active and deferred members not affected by rollback continue with normal tax deadlines
The Cost Claim-Back Scheme
For costs incurred dealing with the McCloud remedy — accountancy fees, IFA fees — the government has set up the NHS Cost Claim-Back Scheme. Claims for accountancy services to complete an HMRC Digital Service application are capped at £1,000 (including VAT) per piece of advice. IFA services for pension decisions are capped at £500 (including VAT) per piece of advice. We help you submit the McCloud reassessment and the Cost Claim-Back application.
Acting on an RPSS
If you receive an RPSS, do not file it away. The 3-month deadline is short, and missing it forgoes potential tax refunds. If you have not yet received an RPSS but think you may be affected, the wait can be frustrating — NHS Business Services Authority is working through a phased rollout that has experienced delays. We monitor the position for affected clients and flag when statements arrive.
What we handle for each type of healthcare professional
Healthcare is not one audience. Different clinicians have different tax positions and need different things from an accountant.
GP partners
Profits split through the partnership, personal self assessment, NHS pension on superannuable income, Type 1 and Type 2 certificates, pensionable income reconciliation between partnership and personal records, and McCloud remedy reassessment. We handle GP partnership accounts, personal self assessment, pension certificates and annual allowance forecasting under one fee.
Salaried GPs
PAYE income through the practice, NHS pension membership, additional income from out-of-hours, locum sessions, or NHS work elsewhere. We handle the self assessment where additional income or pension charges apply, and model the position before significant decisions.
Hospital consultants
NHS PAYE income at high pay bands, often combined with private practice income, clinical excellence awards (CEAs), discretionary points, and extra sessions. The combination frequently triggers the tapered annual allowance. We forecast the position, advise on extra sessions, run the private practice accounts where relevant, and prepare the self assessment.
Locum doctors
Most locums are self-employed or operate through a limited company. We handle bookkeeping for locum sessions, work-related expenses, mileage, professional fees, and the self assessment or corporation tax return. For locums working through a limited company, we set up director-only payroll and model the salary/dividend split.
Junior doctors and trainees
NHS PAYE, professional registration costs, exam fees, indemnity, and Less Than Full Time (LTFT) considerations. Self assessment may not be required if PAYE covers everything, but professional expenses and CPD costs often go unclaimed. We review the position annually and reclaim what’s due.
Dentists
NHS dentists with mixed NHS and private income, associate dentists working under self-employed contracts, principal dentists running practices, and private practice owners. We handle the full mix — practice accounts, personal self assessment, payroll for associates and staff, and VAT where applicable.
Allied health professionals
Physiotherapists, psychologists, occupational therapists, optometrists, pharmacists, paramedics — self-employed and limited company practices. We handle the bookkeeping, year-end and tax for any UK clinician in self-employed practice.
Private healthcare practices
Limited companies running private GP clinics, specialist clinics, aesthetic clinics, dental practices, physiotherapy practices, and other private healthcare businesses. We handle statutory accounts, corporation tax, payroll, VAT where applicable, and management accounts.
The tax issues healthcare professionals ask us about most
Type 1 and Type 2 pension certificates — main expenses
Annual pension certification required to keep your NHS pension records accurate.
GPs and dentists who hold pensionable NHS contracts must submit annual pension certificates — Type 1 for GP principals and Type 2 for salaried GPs working in non-NHS practices. Missing or late certificates create discrepancies in pension records that surface years later, often at retirement. We submit certificates on time and reconcile against your NHS Pension records.
Private practice profits
Sole practice, limited company, or hybrid — the structure choice matters more than most clinicians realise.
A consultant running private practice alongside NHS work can do so as a sole trader, through a limited company, or as a contractor through a private hospital’s chambers arrangement. The tax outcome differs significantly across these — and the right answer depends on income level, intentions for the profits, and how the income interacts with the NHS pension annual allowance. We model the alternatives.
Locum vs salaried — the tax angle
Often comes down to flexibility, but the tax position matters too.
For salaried roles, PAYE handles tax with relatively few choices. For locum work, you can claim a wider range of expenses (mileage, equipment, indemnity, professional fees, training) but bear the National Insurance and tax burden directly. For limited company locum work, salary/dividend planning can be tax-efficient but adds compliance complexity. We model the after-tax outcome under each structure.
Professional expenses
Many clinicians never claim what they could.
GMC registration, BMA membership, indemnity (MDU, MPS, MDDUS), Royal College fees, exam costs, journal subscriptions, CPD courses, conferences, work-related travel, mileage for genuine business journeys — all allowable for self-employed clinicians and many allowable as employment expenses for PAYE clinicians under S336 ITEPA 2003. We claim every legitimate expense.
Sole-trader clinicians and MTD for Income Tax
Sole-trader doctors, dentists and allied health professionals with qualifying income above the current MTD threshold now fall into Making Tax Digital for Income Tax. The threshold is being phased down over time, so clinicians just under it today may be in scope within the next tax year or two. We get sole-trader clinicians on Xero and ready for quarterly submissions before the deadline.Additional hours for part-time staff — pensionable from April 2025
From 1 April 2025, NHS scheme regulations were clarified so that additional hours worked by part-time staff are pensionable up to whole-time equivalent (WTE) hours. Hours above WTE remain non-pensionable. Employers must notify affected members by 1 January 2026 of any historical correction available, with elections normally made within 3 months. We review the position for part-time clients and advise on backdated contributions where worth it.
What can a UK healthcare professional claim as an allowable expense?
For self-employed clinicians, the wholly-and-exclusively rule applies. For PAYE clinicians, a narrower set of expenses is allowable under S336 ITEPA 2003 — broadly, expenses incurred wholly, exclusively and necessarily in performance of the duties.
Professional fees and memberships:
- GMC, GDC, NMC, HCPC, GPhC registration fees
- BMA, BDA, RCN, Royal College fees
- Specialist society and faculty memberships
- Medical defence union (MDU, MPS, MDDUS) subscriptions
- Indemnity for private practice
- Professional development course fees
- Exam fees and Royal College assessments
Equipment:
- Stethoscopes, otoscopes, ophthalmoscopes
- Diagnostic equipment for private practice
- Computers, laptops, software for clinical record-keeping
- Annual Investment Allowance — 100% deduction on qualifying equipment up to £1,000,000 per year
Travel and mileage:
- HMRC mileage at 45p per mile (first 10,000 business miles), 25p thereafter
- Mileage between practices for genuine business journeys (not home-to-base commute)
- Travel to courses, conferences and CPD
- Parking and tolls
- Public transport for business journeys
Education and CPD:
- Course fees and conference attendance
- Journal subscriptions and online medical resources
- E-learning subscriptions (BMJ Learning, DRSP, UpToDate)
- Textbooks and reference materials
- Mandatory training relevant to your specialty
Practice expenses (for self-employed clinicians):
- Locum agency fees and commission
- Marketing for private practice
- Website hosting and domain
- Practice management software
- Accountancy and bookkeeping fees
- Use of home as office (HMRC simplified rate £10–£26 per month, or actual business-use proportion)
- Business insurance (in addition to indemnity)
Limited company-specific:
- Director’s salary and employer NIC
- Pension contributions from the company
- Business mileage at HMRC rates
- Company-purchased equipment under full expensing rules
- Director’s loan account management
Not allowable: clothing for normal work (suits, scrubs purchased privately), home-to-base commuting, locker rentals, parking at your regular workplace, glasses or contact lenses (unless solely for screen work — separate rules apply), entertaining patients or colleagues, and the personal-use portion of any dual-use item.
Who we work with
NDCA healthcare clients fall into a few groups:
- GP principals and partners in NHS general practice
- Salaried GPs with additional locum or private income
- Hospital consultants with NHS and private practice
- Locum doctors at sole trader or limited company level
- Junior doctors and trainees with side income
- NHS dentists and associate dentists
- Private dentists and dental practice owners
- Allied health professionals — physiotherapists, psychologists, optometrists, pharmacists, paramedics
- Private healthcare practice owners (limited company structures)
- Doctors approaching retirement with NHS pension planning needs
- Clinicians affected by the McCloud remedy
If your situation is not on the list, send us a message — it almost certainly fits.
How NDCA works
Three things make our service different for healthcare professionals specifically.
- Fixed monthly fee
You pay one price every month for everything we agreed at the start — bookkeeping, NHS pension certificates, annual allowance forecasting, locum or private practice accounts, self assessment or corporation tax. No clock-watching, no surprise invoices when a pension question lands. - A real human, fast
You get a named accountant who understands NHS pension complexity, locum tax rules, and the realities of clinical scheduling. Most questions get a same-day reply, which matters when an extra-session decision needs making this week. - Built around the way clinicians actually work
Hospital shifts, locum sessions, partnership profit-share, on-call payments, CEAs, private practice income, NHS pension growth — the financial picture is fragmented and rhythm-dependent. We build the workflow around clinical schedules and pension cycles, not around a generic accountancy calendar.
Xero is the only platform we use
Xero is the only bookkeeping platform we run. For healthcare clients, that matters.
For locums, Xero tracks income by hospital, agency and trust, with appropriate expense coding for each. For limited company clinicians, Xero handles payroll, dividends, director’s loan and corporation tax. For private practice businesses, Xero feeds management accounts that show profitability by service line. Live bank feeds reconcile against actual deposits. The VAT return calculates automatically where applicable.
If you are not yet on Xero, we migrate you across as part of onboarding. If you are already there, we plug straight in.
Apron for invoice capture
Healthcare professionals accumulate paperwork from dozens of sources. Indemnity renewals from MDU, MPS or MDDUS. GMC renewals annually. Royal College fees, exam invoices, course providers, journal subscriptions, equipment purchases, mileage logs, hospital parking receipts.
We use Apron to capture all of it. Apron is included in your monthly fee — no separate subscription. Forward an invoice or receipt to your dedicated Apron email address, or snap a photo, and the supplier, date, amount, VAT and line items are pulled out automatically and pushed into Xero — coded to the right cost line. By the time year-end arrives, every professional expense is claimed.
NHS pension or McCloud question?
Healthcare tax positions are more complex than most accountants are set up to handle. Send us your situation — we will come back within one working day with a fixed monthly quote
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Switching from another accountant
If you already have an accountant who is not familiar with NHS pension annual allowance work, has not heard of McCloud, or has never advised on locum tax structures, switching is simpler than people think. We send your current accountant a professional clearance letter, collect your records, and pick up where they left off. Most healthcare clients are fully on-boarded within two weeks.
You do not need to wait for year-end. You do not need an awkward phone call. We handle it.
Healthcare accounting FAQs
Not necessarily — but most clinicians end up needing one once they have any of: additional locum income, NHS pension annual allowance charges, private practice income, the tapered allowance applying, or unclaimed professional expenses on a P87. For PAYE-only juniors with no extras, a self assessment may not even be required.
The McCloud remedy reverses age discrimination in public service pension schemes. It affects you if you were a member of the NHS pension scheme on or before 31 March 2012 and had pensionable service between 1 April 2015 and 31 March 2022. From 1 October 2023, your service during that period was rolled back to the legacy scheme. At retirement, you'll be given a choice between legacy and 2015 scheme benefits for those seven years.
The RPSS contains revised pension input amounts for each year of the remedy period. You have 3 months from the date you receive it to submit a reassessment to HMRC via the dedicated digital service. The reassessment may result in a refund of annual allowance charges previously paid, or in some cases additional tax to pay. The vast majority of members are likely to receive refunds. We handle the reassessment and the Cost Claim-Back application.
The annual allowance is the maximum your pension can grow each year before a tax charge applies. The standard rate is £60,000 for 2025/26. NHS pension growth is the increase in capital value of your future pension entitlement — not the contributions you pay. A high-earning year, a backdated pay award, or extra sessions can push pension growth above the allowance and trigger a charge at your marginal rate.
If your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, your annual allowance is reduced by £1 for every £2 over the £260,000 adjusted income limit. The minimum tapered annual allowance is £10,000. This catches many consultants, especially those with additional income, CEAs or extra sessions.
Scheme Pays lets the NHS pension scheme pay an annual allowance charge of £2,000 or more directly to HMRC, with a corresponding actuarial deduction from your pension benefits at retirement. It protects in-year cash flow but reduces your pension. We model the trade-off before recommending it.
GP principals (Type 1) and salaried GPs working in non-NHS practices (Type 2) must submit annual pension certificates to confirm their pensionable income. Missing or late certificates create discrepancies in pension records that surface years later. We handle the submissions.
For most occasional locum income, sole trader is simpler and works fine. For substantial regular locum income (typically £50,000+ profit), limited company structure often becomes more tax-efficient — corporation tax (19%-25%) is lower than higher-rate income tax (40%-45%), and salary/dividend planning offers further flexibility. We model both at your actual income level.
If you're self-employed or work through a limited company, yes — they are wholly business expenses. If you're PAYE-only, GMC fees, BMA fees and indemnity can be claimed as employment expenses on a P87 (or your self assessment if you file one) under S336 ITEPA 2003. Many PAYE clinicians never claim these, despite being entitled.
Most genuinely medical services provided by qualified clinicians are exempt from VAT under VAT Notice 701/57. Cosmetic procedures, aesthetic treatments without a clear medical purpose, and some service-line elements (e.g. expert witness work, occupational health reports for legal proceedings) can be standard-rated. The boundary is increasingly scrutinised by HMRC. We assess the position for any private practice we work with.
Sole-trader doctors, dentists and allied health professionals with gross self-employment income over £50,000 fall into MTD for Income Tax from 6 April 2026. The threshold drops to £30,000 in 2027 and £20,000 in 2028. Limited company clinicians and PAYE-only clinicians are not affected.
Xero, exclusively. We are a certified Xero Partner. We integrate Xero with Apron for receipt and supplier invoice capture, and structure records to support NHS pension certification, McCloud reassessment and annual allowance forecasting.
Yes. NDCA is regulated by the ACCA (Association of Chartered Certified Accountants).
We are remote first. We work with healthcare professionals across the UK using Xero, so location does not matter.
Yes. Book one on 01903 968618 or via the contact form.
Ready to hand over the tax side?
Most healthcare professionals hand us the NHS pension paperwork, the practice accounts, and the locum income — and never think about HMRC deadlines again. Send us a few details — we will come back within one working day with a fixed monthly quote.
