GP Partnerships

• If your income can go up with profits, you are also personally liable for any losses. So, if the practice is going down the drain you may well find that your savings or even your house are on the line. In fact any partner in isolation can be made responsible for the debts of the entire business. So for example, if the practice owes a lot of money to an external party and that all the partners apart from you have fled to Bolivia, then you could be sued individually for everyone else's debts.
• You get taxed on profits and not on your income. If you do not draw all the profits out of the practice (for example because you want to save it to develop a new service a few years later on or purchase some equipment) then you you still have to pay tax on any undrawn profits.
• A lot of time is taken up by management, accounting and other non-clinical considerations. Indeed many GP partners see very few patients. For some, the managerial side can be a real distraction and frustration. In some cases, this can also lead to clinical deskilling.
• Unless you join a GP Partnership in its infancy (i.e. when it isn't worth very much financially), joininig a partnership can be a costly business. If the partnership has decided to buy the building hosting the GP practice, you will also have to own part of the building and this may force you to make a property investment which could lead to losses. GP Partnerships are a huge financial commitment through which you are joined at the hips with others, and this makes it very difficult to leave it.
• You are responsible for hiring, firing and monitoring staff. In normal circumstances this is not an issue for most people. But being personally legally and financially responsible for the actions of others can be a daunting prospect.
• You have no employment rights. No sick pay, no holiday pay, no paid maternity. Being ill, pregnant or going on holiday simply means that less work gets down and therefore less income is taken. This in turns reduces profits and therefore your share (and that of the other partners since you are all sharing the same pot).

The answer is: "It depends on a lot of factors".

One of the largest costs is the building itself. If the practice leases it premises then there are no capital costs associated with the building. However if the practice owns the building there will be most likely be a loan to finance the purchase and you will be ask to contribute towards it. If this is the case, you must make sure that the building has been properly valued and you might in fact need to commission your own valuation to ensure that you are not investing into a property that will make you lose money from the outset. Because loans are typically over a period of 25 years, you must make sure that you fully aware of the way interest is being charged and particularly whether the rate is fixed or variable.

Another sizeable portion of the cost is your contribution to the working capital of the practice. Essentially the current partnership has money in the bank account, money was spent to buy stock, furniture and other fixtures, and since you will be sharing everything, you need to buy your share of it. Typically this represents a sum of approximately £6,000, but a dispensing practice could have a much higher working capital. Enquire also as to whether you will be required to provide the full amount upfront or whether you will be allowed to build up to it. This could make a significant difference to your cashflow.