Ten Key Issues for Primary Care Networks Today 


  1. Bank accounts

For good financial governance, we recommend you have a separate PCN bank account, which the members of the PCN have access to. However currently SBS can only have one registered bank account per entity. Therefore, you will need the funds to go into the registered bank account of the nominated payee, and then be transferred directly to the PCN account immediately on receipt.

  1. Record keeping

You should have a separate accounting programme for the PCN records, so that all members are aware of the current position and performance within the network. We recommend that this should be cloud based so that 1) all members can have access for financial transparency and 2) the data can be easily allocated to each practice when Making Tax Digital requires practices to report quarterly to HMRC.

We recommend using Xero, which provides real-time live data and connects directly to the PCN bank account, and then all members of the PCN can have access.

  1. Network funding

Please note that the network funding of £1.50 per patient is due for the full 12 months of 2019/20. Therefore, in July you should be invoicing for the backdated 3 months’ equivalent from April to June, and one month for July.

The other reimbursements (clinical director, clinical pharmacist, social prescriber etc.) are only due for 9 months from July 2019 to March 2020.

  1. VAT

Be mindful of each practice’s own taxable supplies for VAT, and how close you are to the £85,000 threshold. You will also need to consider each member practice’s current VAT position, as they may be registered already for other reasons.

This may affect who your lead practice is, as they may be providing taxable supplies to the network and could have to charge VAT.

  1. Clinical director payment

It is important to consider how clinical directors are paid and the treatment of the reimbursement within the practice.

Keep in mind that you cannot be an employee of a practice in which you are already a partner! You should consult your accountant to determine the most appropriate payment structure.

You may also need to consider amending your partnership agreement to reflect this. 

  1. Network Engagement Funding

Weighted funding of £1.76 per patient is due for signing up to participate in a network. Note that this is paid directly to each individual practice, not to the network nominated payee on behalf of the network.

While paid in connection with the network, this is a practice payment and it is therefore up to practices to decide how they wish to use it.

This payment should be due from 1st July 2019.

  1. Flexibility in governance

Allow yourself a mechanism to adopt change in your legal agreement. You may find your PCN structure changes, particularly once the DES comes down in April 2020, and you therefore may want flexibility in your agreement to change based on circumstances.

  1. Surplus/Deficit of PCN

Remember that the PCN is not a separate entity, it is a network of entities operating collaboratively.

This means that any surplus or deficit from the network actually belongs to the individual practices, and needs to be reported within their own individual finances.

  1. Provision of staff vs. services

Provision of staff is a taxable supply for VAT, but provision of services is not. To meet the criteria for providing clinical services, you need to:

  1. Hold a contract to deliver primary care (GMS/PMS/APMS)
  2. Retain control and direction of the staff member providing the service

This is only applicable to healthcare services. Provision of non-healthcare services such as back-office functions, training and management, are not exempt from VAT.

  1. Cost sharing groups (“CSG”)

If you are using a CSG to bear the costs on the behalf of the network, remember:

  1. The CSG must not make a profit and can only charge back at cost
  2. You must be a member of the CSG to benefit (i.e. shareholder, member or partner)
  3. The CSG needs to record exactly its costs related to the network to quantify the chargeback

Remember you need to be able to demonstrate all of the above to HMRC!

 How can Ramsay Brown can help?

As AISMA registered medical specialists and members of the ICAEW healthcare community, we have significant experience of the technical complexities of Primary Care. We can provide support to your PCN by:

  • Review your PCN structure and advise of potential liabilities and how to manage them
  • Set up and manage Xero software, tailored specifically to your PCN structure/members
  • Assist with PCN bookkeeping, invoicing and monthly reporting
  • Prepare annual accounts and meet with PCN members to discuss implications
  • Provide personal tax advice for clinical directors
  • Review CSG bookkeeping to ensure compliance with HMRC requirements


Katie Collin BA(Hons) ACA



Ramsay Brown LLP