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Sole trader, partnership or company: structuring a private practice
Clinicians, therapists and consultants setting up in private practice face the same question as any business owner. The answer depends on profit, plans and the people involved.
Many clinicians start private work alongside an employed role, as sole traders. As private income grows, or colleagues join, the structure deserves a fresh look.
Two common routes
Sole trader or partnership
- Simple to set up and run
- Profits taxed as income each year
- Making Tax Digital applies above the thresholds
- Personal liability for debts
Limited company
- Corporation tax of 19% to 25% on profits
- Choice over when to take income
- Accounts, filings and payroll to run
- Off-payroll rules for some locum work
Questions that decide it
- How much profit will private work make, and how much of it do you need to draw?
- Will others share ownership, now or later?
- Do NHS pension arrangements, professional indemnity or contracts favour one route?
- Will you engage locums or associates, and on what terms?
There is rarely one right answer. Model the next three years under each option, including the costs of running a company, before deciding.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.