Doctors set up companies to avoid pension tax hit

Julian Elford, consultant radiologist at Hampshire Hospitals Foundation Trust, said limited liability partnerships could provide a way for consultants to do additional work without running into tax issues with their pensions.

Meanwhile, HSJ has learned that consultants at Buckinghamshire Healthcare Trust – which has a backlog of 8,000 to 9,000 unread scans – have recently set up an LLP for this purpose, and are waiting for the trust to contract with it, before carrying out additional work.

Dr Elford is a member of an LLP which was set up two and a half years ago and has 25 radiologists as members. It has taken on work from HHFT which might otherwise have been outsourced to private firms, he said.

Nationally, many consultants have been reluctant to take on extra sessions because of the potential impact of the extra income on their pensions, with breaches of the lifetime and annual allowances incurring penalties. 

Providing services through LLPs can avoid this issue and, Dr Elford argued, can be cheaper for trusts than commercial outsourcing. He said: “I have had many enquiries about setting up LLPs. It is the direction of travel. Clinicians get reports written by people they know and can talk to, while patients are getting a local, quality service.”

Doctors at some trusts made moves toward setting up LLPs, or similar vehicles, before covid, also due to pensions tax. Northumbria FT set up a firm for its doctors.

Demand for scanning is increasing by about 10 per cent a year, while the number of radiologists in training has recently been increased but will take several years to impact on consultant numbers, he said.

For some trusts this has meant backlogs of scans which need to be read by a radiologist have built up. Buckinghamshire’s November board papers showed more than 11,000 scans had not been reported on in October, including at least 350 for patients on a two-week wait pathway. By the end of November, this had been reduced to around 8,000,and the trust says that there are now no two-week wait scans within this.

HSJ understands the pensions impact of carrying out extra work was a major issue for radiologists at the trust, who thererfore decided to form an LLP. The trust is now hoping to see “a considerable reduction” in numbers of unread scans by next month.

Chief operating officer Raghuv Bhasin said: ”Patient safety is our number one priority and all those needing urgent scans are offered an appointment within two weeks and the results of those scans are available within two weeks of them being conducted. Patients waiting for the results of non-urgent scans have seen longer waits than we would like and we are sorry for this.

“We are outsourcing reporting to reduce this backlog and are bringing in additional capacity in the coming weeks.”

Updated: 13.34 8 December to clarify position on two week waits.