Should I set up a company for my private practice?

The options

	Sole trader	Partnership	Limited company
Set-up	Register for Self Assessment	Partnership agreement and registration with HMRC	Incorporate with Companies House (£100 online at the time of review)
Liability	Unlimited, personal	Unlimited unless an LLP	Limited to the company for business debts, unless you give personal guarantees
Tax	Income Tax and National Insurance on profits	Each partner taxed on their share	Corporation Tax on profits, then tax on salary and dividends you take
Admin	Lowest	Moderate	Annual accounts, confirmation statement, Corporation Tax return, payroll
CQC (England)	You register as an individual. No separate registered manager if you are fit to manage and in full-time day-to-day charge.	Registered manager condition applies	Registered manager condition applies, and every director must be a fit and proper person

Tax

At the time of review:

• Corporation Tax is 19% on profits of £50,000 or less, 25% on profits over £250,000, with marginal relief in between.
• Dividends in 2026/27 are taxed at 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate) above a £500 dividend allowance.

So money you take out of a company is taxed twice: once in the company and again in your hands. The saving compared with sole trader status comes mainly from National Insurance differences, from leaving profits in the company, and from timing. It shrinks at lower profits and after accountancy costs. The basic and higher dividend rates each rose by two percentage points in April 2026, so older advice may overstate the benefit. Ask an accountant to model your own figures. See tax implications.

VAT is a separate question that turns on what you supply rather than your structure. See VAT for private GPs.

What limited liability does and does not do

A company’s debts, such as a lease or a supplier contract, belong to the company. That is useful once you sign premises leases or employ staff. But:

• A patient can still claim against you personally for your own care. You still need personal medical indemnity, and the company may need its own cover too. See insurance for a practice.
• Banks and landlords often ask directors of a new company for personal guarantees, which put your own assets back on the line for that debt.

CQC registration

In England the CQC registers the legal entity that carries on the regulated activity. The Registration Regulations 2009 impose a registered manager condition on any company or partnership, and on an individual who is not fit to manage or not in full-time day-to-day charge. A solo GP’s company therefore needs a registered manager, who can be you. Directors must also meet the fit and proper person requirements.

If you change structure later, for example from individual provider to limited company, the CQC treats it as a change of legal entity. You complete the provider application again with supporting documents. Choose your structure before you apply to avoid doing it twice. See registering with the CQC.

NHS pension

Private fees are not NHS pensionable, whatever your structure. The risk is NHS work. NHSBSA lists work by “a freelance GP locum who trades as a limited company” as not pensionable. Keep NHS locum sessions outside the company if you want to pension them, and take advice if you are an NHS GP partner setting up a separate private entity.

If your company supplies a clinic

If you work for someone else’s clinic through your own company, the off-payroll working rules (IR35) may apply. They aim to make workers who would be employees if engaged directly pay broadly the same tax as employees. In most cases the client decides your status, though different rules apply when the client is a small business.

When a company tends to make sense

• Your private profits are, or soon will be, well above what you need to live on.
• You are taking on a lease, staff or significant borrowing.
• You are starting with another GP or an investor and want clear shares.
• You plan to grow into a multi-clinician practice or eventually sell it.

For a few sessions a week, a sole trader start is often simpler. You can incorporate later, but plan for the CQC re-application if you do.

The admin of a company

Expect to file annual accounts and a confirmation statement (£50 a year online at the time of review) with Companies House, a Corporation Tax return with HMRC, and run payroll if you pay a salary. Directors need to verify their identity with Companies House through GOV.UK One Login. Most GPs with a company use an accountant, which is a real annual cost to weigh against the tax saving.