Finance Considerations for Practices Signing PCN Contracts

It’s likely you’re already familiar with Primary Care Networks (PCNs). They are part of the new five-year GP contract where practices will receive additional funding by joining networks. Those networks are likely to see practices service a larger community and work together to achieve scale.

This is part of the NHS long-term plan to:

  • Improve recruitment and retention
  • Manage financial and estates pressured
  • Provide a wider range of services to patients
  • Integrate within the wider health and care system

In this article, we have highlighted the key considerations for practice owners as the pace of PCN increases and many GPs are feeling the pressure of making major decisions within the existing timeframe.


Whilst the provision of healthcare is exempt from VAT, other costs such as staff or management services are not. During the initial structuring of the group, VAT will have to be considered to ensure the burden is equally distributed or indeed measures are taken, such as a cost-sharing group, to limit liability.

NHS Pensions

Guidance has yet to be issued on how the topic of NHS pensions will be resolved. At present, staff who have an NHS pension receive this as their employer holds an NHS contract. Staff who remain employed by an existing organisation will have no issues. However, those employed by a new entity may not as easily receive access to an NHS pension scheme.

Employment Liabilities

If one lead practice received funds and employs staff, then they will solely carry the liabilities of those staff. It is possible to spread these within the PCN, but careful planning and insurances are required.

Clinical and Financial Directors Pay

HMRC have not clearly stated their position on this new arrangement for UK tax purposes. We would recommend seeking advice from your accountant as not penalties completing partnership tax returns and declaring the income on the individual tax returns could be significant.

Seeking professional advice

On the most recent changes, Nipun Gupta, Partner at Bracey’s Medical, said: “It’s vital for individuals to seek help to navigate these changes. From deciding whether you have flat, lead or limited company status to complex VAT issues, professional and expert advice should be sought.”

If you require help or advice on any of the topics mentioned in this article, please contact our specialist medical accountancy team or call 01438 727141.