London is one of the world’s leading commercial and financial centres, and has historically attracted a high concentration of medical practices. Harley Street in Central London for instance, has been a notable area for medicine and surgery since the 19th century. Today, quality care can be found beyond Harley Street and throughout London, including around Cavendish Square Gardens, a stone’s throw away from the Royal Society of Medicine.
There are both benefits and drawbacks to opening a medical practice in Central London. On one hand, it represents a large, growing market and possesses a convenient central location, easy access to transport, a deep talent pool for recruitment and well-developed infrastructure. On the other hand, London is renowned for high property prices and high wages. Let Tax Agility, the London chartered accountants for start-ups walk you through some of the considerations for setting up a medical practice in Central London.
There are a number of costs to consider when setting up a medical practice, such as utilities, wages and stock purchase, as well as rent or mortgage payments. While it is commonplace to borrow the necessary capital from a reputable bank and spread the cost over a longer term, there are now other lenders that also can cater to small businesses.
In addition, you may qualify for the Enterprise Investment Scheme (EIS) or the Seed Enterprise Investment Scheme (SEIS) – two UK government initiatives that encourage innovation by granting private investors significant tax breaks when investing in companies. Our accountants are happy to discuss funding options available to set up your medical practice.
Choice of business structure
You need to decide on the most suitable structure to incorporate your practice, with Partnership, Limited Liability Partnership (LLP) or Private Limited Company being the popular choices.
The suitability of the structure depends on the type of practice you will be running. These have an impact on the ways you manage your liability, pay your tax and how profits are distributed. It is best to engage our specialist accountants in discussing the best structure for your medical practice.
Business plan, cash-flow projections, budgets, and trading forecasts
Initially, you should draw up a business plan that stipulates your operation plans, your team, customer analysis, competitive analysis, marketing plan and financial plan. Ideally, the financial section should comprehensively outline the costs from setting-up to on-going, as well as how your medical practice plan to generate revenues and your goals.
Consider setting financial Key Performance Indicators (KPIs) and use the data to help spot short-term problems and long-term trends. While there are no rules for which KPIs to use, a few worth considering include net profit margin, current ratio, working capital and debt ratio. At Tax Agility, we have been helping small businesses across London setting up their financial KPIs and we would be happy to work with you too.
Once you get the business going, cash-flow is key and keep a look out for cash-flow gap (when your cash inflows and outflows don’t line up). Again, this is an area which we’re happy to assist in.
Buying or leasing your premises
Unlike most other commercial properties, medical practice premises have to comply with a number of strict regulations. They are categorised as “D1” properties under the Town & Country Planning Act 1987, with some being purpose-built clinic and healthcare spaces that can be immediately set up for practice. These are usually available for lease, however, can also be purchased outright. Our local chartered accountants can advise on the best strategy for your practice, as well as any rental reimbursements that you may be entitled to.
Register with private health insurance companies
While the National Health Service (NHS) covers the majority of the healthcare sector in the UK, there is now a growing trend for private healthcare. There are quite a few top private medical insurance providers that are responsible for covering in-patient and day-patient costs – provided that your practice is registered with them.
Your medical practice will need to comply with numerous registration and licensing requirements, including the General Medical Council, Companies House and HM Revenue & Customs, Care Quality Commission (CQC), Data Protection Act and Disclosure and Barring Service.
Practice insurance is a necessity for all medical practitioners as it protects the physical building and the contents within; as well as your revenue in the event of a material damage claim. In addition, a policy covers your liabilities to the public and your employees as part of meeting your legal obligations as an employer. An all-encompassing practice insurance policy is recommended and provides peace of mind.
Setting-up financial, management and record-keeping systems
Once the practice is established and running, you will need a system of checks for accountability. Our accountants for start-ups, located in Cavendish Square, have the experience to monitor medical practices and review your operations.
How Tax Agility can help your medical practice in Central London
Private medical practice in the UK is ever evolving, and changes in regulations and the insurance market can also affect the industry. For a start-up practice like yours, our experienced start-up accountants in London can be a source of trusted financial and legal advice.
Simply call us today on 020 8108 0090 or use our Online Form for more information on how we can help you.
This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.
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