Accounting error may be costing doctors dearly

Senior medical professionals with dual sources of income may be paying thousands of pounds worth of unnecessary national insurance contributions (NICs).

They are being advised to urgently review their NIC situations after it was revealed that having more than one income stream has resulted in massive overpayments.

The situation has become particularly acute following radical changes in the NHS that mean that many GPs are setting up private limited companies to contract for new GP surgeries and medical centres. 

“The groups affected are high-earning medical professionals, such as consultants and GPs, who have dual sources of income – for example they could be employed by the NHS in one form or other and also be engaged in private practice,” explained Kevin O’Brien, an advisory partner at accountants and business advisers DTE.

“We have reviewed a number of new cases and managed to obtain refunds running into several thousands of pounds. One case went back to 2001/02.”

Numerous medical practitioners lost out financially after previous accountants failed to appreciate that Class 4 NI contributions can be deferred if the individual has significant earnings via employment and is therefore already paying the maximum contribution.

“We have now carried out this cost-saving work for a significant number of new clients,” added Kevin O’Brien.

“In addition, private limited companies set up to contract for new GP surgeries and medical centres could generate significant employment income for GPs who are also self-employed. So it’s critically important to understand the deferment potential from the outset, rather than miss out and have to claim retrospectively a number of years down the line.”

(11/7.08)