Skip to main content

Digital

Publication, Part of

GP Earnings and Expenses Enquiry - 2004-05, Final report

Publication Date:
Date Range:
06 May 2004 to 05 Apr 2005

Summary

These results are based on a sample of 17,897 GPs who report one or more sources of self-employment income with accounting year ending in the final quarter (1st January 2005 to 5th April 2005). Figures relate to earnings, expenses and income derived from all self-employed sources, as reported on tax returns, and so include private as well as NHS work. However, they do not include earnings from employment (as a salaried employee). All estimates presented in the summary exclude employer's superannuation contributions and relate to NHS and private work, for both full-time and part-time contractor GPs. Earnings figures relating to salaried GPs are presented separately in Paper H.

The data source for the survey is HM Revenue and Customs' (HMRC's) tax self-assessment (SA) database. Analyses were run on an anonymised dataset by statisticians in HMRC Knowledge, Analysis and Intelligence Information Centre.

This enquiry is the first to be affected by the new General Medical Services (nGMS) contract. Consequently, there have been some changes in methodology, which are discussed further in Paper C. For example, in England and Wales, contracted GPs have been identified by considering the proportion of income derived from self employment and employment sources. This could have an effect on results for some of the smaller groups of GPs analysed.

The Headline Results of the 2004/05 EEQ, published by the Information Centre in November 2006, are superseded by Paper A in this report following adjustment to take account of a technical issue around employer's superannuation contributions. The Technical Note on Updating of 2004/05 GP EEQ Results was published in April 2007 and has been included as Paper B in this report.

This report has been agreed by the Technical Steering Committee (TSC), which has representation from the four UK Health Departments, NHS Employers and the British Medical Association.

Highlights

The main findings for the UK in 2004/05 are as follows:

Paper A headline results in the uk in 2004/05

  • Average net income among GMS GPs (those working under General Medical Services) was: - £92,184 for non-dispensing GPs (an increase of 25.0 per cent since 2003/04) - £117,036 for dispensing GPs (an increase of 24.5 per cent since 2003/04).
  • Average net income among PMS GPs (those working under Personal Medical Services) was: - £107,475 for non-dispensing GPs (an increase of 19.9 per cent since 2003/04) - £127,613 for dispensing GPs (an increase of 18.8 per cent since 2003/04).
  • Average net income among GPMS GPs (those working under GMS or PMS contracts) was: - £96,593 for non-dispensing GPs (an increase of 23.0 per cent since 2003/04) - £119,556 for dispensing GPs (an increase of 22.6 per cent since 2003/04).
  • Among all non-dispensers and dispensers (combined), average net income was: - £96,322 for GMS GPs (an increase of 24.8 per cent since 2003/04) - £110,164 for PMS GPs (an increase of 19.5 per cent since 2003/04) - £100,170 for GPMS GPs (an increase of 22.8 per cent since 2003/04)
  • Average GPMS gross earnings were £230,097. Average expenses were £129,926.
  • The GPMS expenses to earnings ratio (the percentage of GPs' overall earnings accounted for by tax-allowable expenses) was 56.5 per cent. This is a decrease from the 2003/04 expenses to earnings ratio of 59.5 per cent, reflecting the higher increase in overall earnings compared to expenses over this period.
  • PMS net income was 14.4 per cent higher than GMS net income (£110,164 compared to £96,322); the corresponding 2003/04 percentage was 19.5 per cent (£92,168 compared to £77,152).
  • GMS dispensers had a 27.0 per cent higher average net income than GMS non-dispensers (£117,036 compared to £92,184). PMS dispensers had an average net income 18.7 per cent higher than their non-dispensing counterparts (£127,613 compared to £107,475). In 2003/04, average GMS net income was 27.5 per cent higher among dispensers and average PMS net income was 19.9 per cent higher among dispensers.

Paper B technical note on updating of 2004/05 GP earnings and expenses enquiry results

  • This paper presents a methodology to update 2004/05 GP Earnings and Expenses Enquiry (EEQ) Results in order to put them on a comparable basis with previous years.
  • This paper has been agreed by the TSC, which has representation from the four UK Health Departments, NHS Employers and the British Medical Association.
  • GP Earnings and Expenses Enquiry 2004/05 Headline Results, published in November 2006, reported that the average net income of GPMS GPs increased by 30.5 per cent between 2003/04 and 2004/05, from £81,566 to £106,404. Gross income in 2004/05 was reported as £236,330 and the Expenses to Earnings ratio as 55.0 per cent.
  • The Technical Steering Committee (TSC) is now aware there are a number of reasons for this 30.5 per cent increase, including an estimated 7.6 percentage points which are attributable to the inclusion of employer's superannuation contributions in GPs' pay for the first time in 2004/05. This is equivalent to £6,234.
  • Until 2003-04, employer's contributions to the NHS Pension Scheme (14 per cent of superannuable income ) were not included in tax returns and were therefore excluded from estimates of average GP net income based on tax return data. From 2004/05 onwards, employer's contributions should have been included in tax returns. The methodology presented allows an estimate of the element of employer's contributions included in 2004/05 net income to be made, and can also be applied in future years.
  • Recorded employer's contributions are estimated to account for £6,234 per GP in 2004-05. Subtracting this amount from the previously published headline results of the 2004/05 EEQ gives the following estimates for UK GPMS GPs on a comparable basis to earlier years: - Average net income: £100,170 (an increase of 22.8 per cent since 2003-04) - Average gross income: £230,097 (an increase of 14.1 per cent since 2003-04) - Expenses to earnings ratio: 56.5 per cent (compared to 59.5 per cent in 2003-04).

Paper D  detailed results

  • In 2004/05, average net income was £103,564 in England, £91,151 in Northern Ireland, £82,696 in Scotland and £91,588 in Wales.
  • Between 2003/04 and 2004/05, average net income increased by 22.1 per cent in England, 34.9 per cent in Northern Ireland, 24.9 per cent in Scotland and 23.8 per cent in Wales.
  • Average net income increased with GP age up to the 50-59 age group, and then decreased slightly in the 60 and over age group
  • Urban practices had a lower average net income than rural practices
  • Among GPs in England, those in the South West had the lowest average net income (£89,341)
  • Average net income decreased as the number of partners in the practice increased

Paper E distributional results

  • In 2004/05, it is estimated that 3,060 GPs (9.0 per cent) had a net income of up to £50,000. In 2003/04, this figure was 5,138 (15.8 per cent).
  • In 2004/05, it is estimated that 15,442 GPs (45.6 per cent) had a net income of between £50,000 and £100,000. In 2003/04, this figure was 19,883 (61.0 per cent).
  • In 2004/05, it is estimated that 12,264 GPs (36.2 per cent) had a net income of between £100,000 and £150,000. In 2003/04, this figure was 6,469 (19.8 per cent).
  • In 2004/05, it is estimated that 2,492 (7.4 per cent) of GPs had a net income of between £150,000 and £200,000. In 2003/04, this figure was 904 (2.8 per cent).
  • In 2004/05, it is estimated that 629 GPs (1.9 per cent) had a net income of at least £200,000. In 2003/04, this figure was 222 (0.7 per cent).
  • In 2004/05, it is estimated that 475 GPs (1.4 per cent) had a net income of between £200,000 and £250,000. It is estimated that 154 GPs (0.5 per cent) had a net income of at least £250,000.
  • Dispensing GPs are distributed towards the higher ends of the gross earnings, expenses and net income distributions, compared to non-dispensing GPs. It is estimated that 3.9 per cent of dispensers (209 GPs) and 1.5 per cent of non-dispensers (420 GPs) received a net income of at least £200,000.

Paper F waves 4a and 5a PMS results

  • In the year prior to transferring to the PMS scheme, PMS GPs had an increase in average net income similar to that of their GMS cohorts.
  • In the year that they joined the PMS scheme, there was a step change in the rise of average net income of PMS GPs which was greater than that seen among their GMS cohorts.
  • This is the last in the series of PMS earnings studies and a summary of all the results are included.

Paper G quality and outcomes framework score analysis

  • Both gross earnings and expenses slightly increase with increasing QOF score, and consequently the expenses-to-earnings ratios remain relatively unaffected.

Paper H salaried GP results

  • In 2004/05, average net income among UK GPMS GPs identified as being salaried (more schedule E than schedule D income) was £45,560.
  • It is important to note that the results presented do not differentiate between full- and part-time GPs, and that these results only refer to a sample of salaried GPs who submitted a self-assessment tax return to HMRC in 2004/05.

Resources

Last edited: 1 April 2019 3:00 pm