2004/05 GMS contract (nGMS)
The General Medical Services contract introduced in 2004/05 was designed to improve the way that Primary Medical Care services (GMS, PMS, APMS and PCTMS) were funded and to allow practices greater flexibility to determine the range of services they wish to provide, including through opting out of additional services and out-of-hours care. The nGMS contract was fully in place in 2004/05.
Accounting year-end
The period to which earnings and expenses relate is an accounting year, which may end at any time in the fiscal year. The main results of this report consider only data for contractors and salaried GPs submitting Self Assessment tax returns with accounting years (i.e. full 12 months) ending in the final quarter (Q4) of the fiscal year, i.e. 1 January to 5 April. This allows analysis of information covering the period most compatible with that of health organisations’ financial information, and also ensures that earnings and expense data relate to financial activity largely under the GMS contract which has been in place since 2004/05.
Additional Voluntary Contributions (AVCs)
Additional Voluntary Contributions can be made by a member of an occupational pension scheme over and above his or her normal contributions. They can buy either added years (unless the individual has achieved the maximum 40 years’ membership) or pay in on a money purchase basis.
Alternative Provider Medical Services (APMS)
Primary medical services commissioned from non-GMS or non-PMS providers, for example from the voluntary sector, commercial sector or other NHS trusts.
Contractor GP
Previously referred to as a ‘Principal GP’, a Contractor GP is a practitioner who has entered into a contract with a Primary Care Organisation (PCO), either as a single-hander or in partnership, to provide primary care services. A contractor GP may employ salaried GPs.
Disallowable Expenses
Disallowable expenses are defined as expenses that are not allowed for tax purposes because they are for personal rather than for business use. Examples include repayments of the capital element of business loans and expenses incurred in providing business entertainment.
Dispensing GP
Most GPs are non-dispensers in that they issue a prescription which the patient takes to a pharmacy for the drugs to be dispensed. However, if a patient lives more than one mile from their nearest pharmacy, they can apply to receive dispensing services from their practice. If this request is authorised by the relevant Primary Care Organisation (PCO), the practice then dispenses drugs/medicines to the patient, as well as providing the normal medical services available to other patients. For the purposes of this report, if a practice has at least one dispensing patient on its list, all GPs in that practice are classified as dispensing GPs, as it is assumed that all GPs at a dispensing practice may dispense to those patients who are entitled to dispensing services.
Earnings
Gross earnings for contractor GPs are based on all medical income from self-employment sources. Income from employment sources is not included in averages for contractor GPs.
The majority of salaried GPs have a combination of self-employment and employment income. Therefore, the average total income before tax is based on medical income from self-employment sources and all employment income. The total expenses figure for salaried GPs will also be based on an average total of self-employment and employment data.
Employee’s [superannuation] contributions
These refer to contributions paid by the individual GP to the NHS Pension Scheme.
Employment Income
Formerly known as schedule E income, the tax schedule under which income of directors and employees of a company (and income from pensions) were assessed until the Taxes Act was rewritten. Income that was Schedule E has been reclassified and now forms a category called “Earnings and Pension income”.
Expenses
These refer to the GPs’ outgoings, and relate to business costs e.g. premises, employees, interest on business loans etc. These are also known as allowable expenses under the HMRC tax regime.
Expenses are split into the following categories:
-
- Office and General Business;
- Premises;
- Employee;
- Car and Travel;
- Interest;
- Other, which includes:
- ‘Advertising and business entertainment costs’ (which were classified as business expenses up to 2006/07);
- Interest for businesses where turnover is <£85,000 and interest is not reported separately;
- Expenses for businesses (where turnover is low) and detailed expense breakdown not available;
- Cost of drugs for dispensing GPs.
Expenses figures exclude disallowable expenses.
Expenses to Earnings Ratio (EER)
The expenses to earnings ratio is a measure of the proportion of an individual’s gross earnings that is consumed by business expenses. For ease of understanding it is expressed as a percentage throughout this report.
Fixed Share Partner
Fixed share partners are included in the contractor group and are bound to the practice via the partnership agreement. However, unlike contractors, they choose to take a fixed level of income instead of a share of the practice profits. Consequently this income, although analogous to a salary, would actually be recorded as self-employment income; s/he may also be known as a ‘salaried partner’.
General Medical Services (GMS)
A GMS practice is one that has a standard, nationally negotiated contract. Within this, there is some local flexibility for GPs to 'opt out' of certain services or 'opt in' to the provision of other services.
GPMS
GPMS results are combined results for GPs working in either a General Medical Services (GMS) or a Personal Medical Services (PMS) practice.
Gross Earnings (previously Gross Turnover)
Self-employment and/or employment income from NHS and private work before the deduction of total expenses.
GP census
The annual GP censuses in Wales, Scotland and Northern Ireland are the primary data sources of GP details for this report. Data are collected at 30 September which is the mid-point of the financial year.
Income before tax (previously net income)
Income before tax is the difference between gross earnings and total expenses. It can be considered as the ‘profit’ element of gross earnings for contractor GPs and (for the purposes of this report) relates to pay before tax deductions and employee pension contributions.
Investment in General Practice
Allocations of monies towards primary medical care to deliver NHS services to patients. However, not all the financial flows will reach the GP or practice, for example IT or cost of drugs.
NHS England and NHS Improvement (Region, local office)
The NHS England and NHS Improvement (Region, local offices) changed on 1 April 2015, with a subsequent restructure of the NHS England and NHS Improvement South region on 1 April 2018 and NHS England and NHS Improvement North and Midlands and East regions on 1 April 2019. Shortened versions of their names are used in this report for presentational purposes. The table below shows the shortened versions as well as the full names.