Profits Focus: General surgeons
It was almost a complete case of déjà vu for our latest specialty to come under the accountants’ microscope. Ray Stanbridge reports.
Our headline observation is that ‘general surgeons’ pretty much stood still in 2020.
We have found that the private practice gross incomes for consultants in this specialty surgeons barely changed between 2019 and 2020.
They dropped by £1,000, falling from £157,000 to £156,000.
Costs fell, too, by £2,000 on average, going down from £67,000 to £65,000. As a result, taxable profits actually rose, going up £1,000 from £90,000 to £91,000.
There was a modest fall for some in the costs of defence cover or indemnity insurance. This is the result in some cases of aggressive shopping around and taking advantage of new players in the market.
Most other costs remained pretty constant, so there is very little more to report.
What then of the future?
Obviously, the financial year 2020-21 was, for many, not a good year as a result of the Covid outbreak and resulting restrictions.
This factor was compounded by the fact that some general surgeons do undertake non-essential surgery where demand was hit hard.
However, the Covid outbreak has generated considerable built-up demand and, from early indications, I am pleased to report the financial year 2021-22 appears to have been prosperous for many consultant general surgeons.
We have reported in recent years on the increasing difficulty of affecting realistic year-on-year comparisons because of changes in the way they run their business.
For example, general surgeons, like many other private consultants, now trade in a variety of ways through limited liability companies and limited liability partnerships in addition to the sole trader model.
Others have chosen not to set up in private practice, but to negotiate a second employment with a private hospital or clinic.
Others have decided to specialise in a particular area, commonly breast surgery, rather than do a variety of procedures.
This increased specialisation has been encouraged by the process of revalidation and also the increasing publication of performance indicators through regulators such as the Private Healthcare Information Network.
For these and other reasons, our survey is not in any way statistically significant. Rather, we hope it is a reasonable representation of what an average general surgeon earns and spends in their private practice.
Note that none of the accounts studied for this report were for those who work full-time in private practice.
To be eligible to participate in our survey, consultants:
Hold either an old-style or a new-style NHS contract.
May or may not have incorporated their business;
May or may not work in a groups;
Have a keen interest in developing a private practice;
Have been engaged in private practice for at least five years;
Earn at least £10,000 a year gross from private practice.
Ray Stanbridge (right) is a partner with accountancy, finance and tax advisory medical specialists, Stanbridge Associates Ltd.