MTA
Medical Tax Accountants
Specialist accountants for consultants & surgeons

NHS salary, private practice,
one clear tax picture.

Private practice structure, tapered annual allowance, Scheme Pays and medico-legal income — handled by specialists who work with hospital consultants and surgeons every day.

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The consultant tax problem

Consultants run two tax systems at once — and the pension sits on top of both.

An NHS salary through PAYE, private practice through self-assessment or a company, and NHS pension growth measured against an allowance that shrinks as you earn more. Each part is manageable. Together, they catch out consultants every year.

Two income systems

PAYE handles the NHS salary, but private practice, medico-legal work and any company income run through an entirely separate system with its own deadlines, payments on account and planning opportunities most consultants never use.

The tapered annual allowance

Consultants with private income are the single group most affected by the pension taper. A good year can quietly cut your allowance to a fraction of the standard figure — and the tax charge lands whether you noticed or not.

Private practice structure

Sole trader, limited company, or a mix — the right structure depends on how much you earn privately and how much you actually need to draw. The wrong default costs thousands a year, every year.

How we help consultants & surgeons

Everything a consultant actually needs, in one place.

We work exclusively with medical professionals, so consultant tax isn't an occasional job — the NHS-plus-private income pattern is the work we see most.

Structure analysis

Sole trader vs limited company for your private practice, modelled against your NHS salary and actual private earnings — the tax cost of each, side by side.

Private practice accounts

Accounts and bookkeeping for your private work — clinics, insurers, self-pay and medico-legal — with company formation and management where a limited company is the right call.

Self-assessment & company tax

Personal returns covering NHS employment, private profits and dividends — plus corporation tax where you operate through a company. Filed early, so January never surprises you.

Annual allowance & Scheme Pays

Yearly taper and pension-growth review from your pension savings statement, with the Scheme Pays election prepared and filed where a charge arises.

Medico-legal income

Expert witness and report-writing income handled correctly — including the VAT position, which can change once your self-employed turnover grows.

Year-end planning

A review call before each tax year end — pension contributions, timing of income, company profit extraction — while your options are still open, not after they've closed.

The big decision

Private practice: sole trader or limited company?

The most common question consultants ask us. Below is the honest side-by-side — but with an NHS salary already using your tax bands, the right answer depends entirely on your actual figures.

Sole trader
Limited company
Setup complexity
Minimal. Register as self-employed with HMRC.
Moderate. Companies House registration, business bank account, corporation tax registration.
Ongoing admin
Light. Records plus the self-employment pages of your return.
More involved. Annual accounts, corporation tax return, dividend paperwork, possible payroll.
Tax on profits
Income tax at your marginal rate plus Class 4 NI — and with an NHS salary, private profits usually land in the higher bands immediately.
Corporation tax first; then tax only on what you extract. Profits retained in the company aren't taxed on you personally.
If you spend it all
Broadly similar overall burden at many income levels — simplicity often wins.
Extracting everything as you earn it erodes most of the company advantage.
If you can retain profits
No mechanism — all profit is taxed on you in the year it arises.
This is where companies win. Retained profits, company pension contributions and flexible timing of dividends.
Best for
Smaller private practices (roughly under £30k profit) or those wanting minimal admin.
Established private practices where a meaningful share of profit can stay in the company or fund pension contributions.
The honest answer: a limited company is not automatically better — for consultants who draw everything they earn, it often saves little and adds admin. The company case gets strong when you can leave profit in the business, make employer pension contributions, or smooth income across years. We model both against your real numbers before recommending either.
The pension taper

The tax charge consultants don't see coming.

The tapered annual allowance is the single most common source of unexpected tax bills for hospital consultants. Once your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, your annual allowance tapers down from £60,000 to as little as £10,000.

The trap is that NHS pension growth isn't something you choose — it's driven by your pensionable pay and scheme dynamics. Add a pay award, a Clinical Excellence Award, or a strong private practice year, and your pension growth can exceed a tapered allowance without you contributing a penny more. The excess is taxed at your marginal rate.

What we do:

  • Review your pension savings statement every year and calculate your taper position from your full income picture — NHS, private, and investment.
  • Quantify any annual allowance charge and report it correctly through self-assessment.
  • Prepare the Scheme Pays election where paying from the pension beats paying from cash — and file it before the 31 July deadline.
  • Plan ahead — timing private income, pension contributions and company profit extraction to manage the taper rather than be ambushed by it.

If you've had annual allowance charges in previous years and never checked whether Scheme Pays was the better route, that's worth a conversation — the position can often still be tidied up.

Company use & expenses

The bits that catch consultants out.

Using a company properly

A private practice limited company only delivers value if it's run as one — contracts and insurer registrations in the company name, income billed by the company, and extraction planned rather than ad hoc.

Common pitfalls include insurer recognition being personal while income is billed through the company, dividends taken without the paperwork to support them, and family shareholdings set up in ways HMRC's settlements rules can challenge.

Where consultants group together — chambers, joint clinics or an LLP — the structure question multiplies. We set these up correctly at the start, which is far cheaper than untangling them later.

What consultants can claim

Typical allowable expenses against private practice income include:

  • Medical indemnity for private work
  • Room hire and clinic fees
  • Secretarial and billing support
  • GMC and royal college fees (apportioned)
  • Courses and conferences related to the practice
  • Equipment and consumables
  • Professional use of home
  • Accountancy fees (yes, us)

Claims against your NHS employment income are far more limited — which is exactly why what sits on the private side matters.

Frequently asked

Questions consultants ask us.

Should I set up a limited company for my private practice?
It depends on the size of your private practice and what you do with the income. Below roughly £30,000 of private profit, sole trader is usually simpler and just as efficient. Above that — particularly if you can retain profits in the company rather than drawing everything — a limited company often wins. We model both on your actual figures, alongside your NHS salary, before recommending either.
How does the tapered annual allowance affect me?
Once your threshold income exceeds £200,000 and adjusted income exceeds £260,000, your pension annual allowance tapers down from £60,000 to as little as £10,000. NHS pension growth is measured against that reduced allowance, and the excess is taxed at your marginal rate. Consultants with private practice income are the group most commonly affected — an annual review is essential.
What is Scheme Pays and when is the deadline?
Scheme Pays lets the NHS Pension Scheme settle your annual allowance tax charge in exchange for a reduction to your future pension, rather than you paying the charge from cash. The election deadline for mandatory Scheme Pays is 31 July following the January in which the charge was reported through self-assessment. Whether it's the right choice depends on your age, pension growth and cash position — we run the comparison each year.
How is medico-legal work taxed?
Medico-legal report writing and expert witness work is self-employed income (or company income if you operate through a limited company). It sits alongside private practice income and is declared through self-assessment or the company accounts. It isn't pensionable in the NHS scheme, and if turnover across your self-employed activities exceeds the VAT threshold, some medico-legal services can be VAT-standard-rated — worth reviewing before you cross it.
Can I employ my spouse or family in the private practice?
Yes, where they genuinely work in the practice — typically secretarial, bookkeeping or practice-management support — and are paid a commercially justifiable rate for the work done. Done properly this is legitimate planning; done as a paper exercise it fails HMRC scrutiny. We advise on what's defensible and document it correctly.
What expenses can I claim against private practice income?
Typical claims include medical indemnity for private work, room hire and clinic fees, secretarial and billing support, professional subscriptions and royal college fees (apportioned), courses and conferences, equipment, professional use of home, and accountancy fees. Claims against NHS employment income are far more restricted — mostly flat-rate professional fees and subscriptions — which is why the private practice structure matters.
Do I pay National Insurance on private practice income?
As a sole trader you pay Class 4 National Insurance on private practice profits in addition to income tax. Through a limited company there's no Class 4 — extraction is by salary and dividends, which changes the arithmetic. Because you already have NHS employment income using your allowances and bands, the marginal position needs modelling rather than guessing.
Can I switch to you if I already have an accountant?
Yes — switching is straightforward. We handle the professional clearance letter and paperwork transfer from your existing accountant. Most switches complete within 2–3 weeks with no gap in your compliance.
Does Making Tax Digital apply to my private practice?
If you run your private practice as a sole trader, Making Tax Digital for Income Tax applies from April 2026 where gross self-employment income exceeds £50,000 — digital records and quarterly HMRC updates replace the single annual return. The threshold falls to £30,000 in April 2027. Private practices run through a limited company aren't in MTD for Income Tax — which has quietly become another factor in the sole trader vs company decision.
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