The tax point groups find late
One method, or several defensible ones
The VATHLT2190 test applies to the establishment, so a group can in principle have branches relying on different limbs — one with a qualified sole practitioner, another on direct supervision. That is workable, but it has to be deliberate and documented. An inconsistency nobody can explain is precisely what an enquiry fixes on.
Which sites earn
We rebuild it from the income up: GOS, private, dispensing and goods per branch, staff cost per branch including locum cover, and central overhead apportioned on a basis you have agreed rather than inherited. It regularly changes which practice an owner believes is the problem.
Common questions
Does owning several companies affect our tax?
Yes, and it is routinely discovered late. The £50,000 and £250,000 corporation tax limits are divided by one plus the number of associated companies under CTA 2010 s18D(3). With three other associated companies they become £12,500 and £62,500, so profit that would have been taxed at 19% in a standalone company sits in the marginal band at an effective 26.5% instead. If your group grew by acquiring companies rather than opening branches, check this before your next period end. There is no retrospective fix once the accounting period has closed.
Do all our branches need the same VAT method?
They need a defensible method each, and consistency makes that far easier to sustain. The VATHLT2190 test is applied to the establishment, so a group can in principle have branches on different limbs — one with a qualified sole practitioner, another relying on direct supervision. That is workable but it has to be deliberate and documented, because an inconsistency nobody can explain is exactly what an enquiry fixes on. Document which limb each branch relies on and review it whenever the staffing at that branch changes.
Which branches actually earn?
The question a group should answer monthly and usually cannot, because central costs are apportioned on a basis nobody has revisited since the second site opened. We rebuild it: GOS, private, dispensing and goods per branch, staff cost per branch including locum cover, and central overhead on a basis you have agreed. It regularly changes which site an owner believes is the problem. The busiest branch is often carrying the most central cost, not earning least. Until the apportionment is explicit you cannot tell the two apart.
What happens when we buy another practice?
Beyond the deal, two things need establishing early. Whether the GOS contract position can be varied rather than transferred — the model contract permits variation of the contractor's status rather than assignment to a stranger. And what VAT method the target has been using, because you inherit the consequences of it on a share purchase and you need to know whether it was defensible. Ask early — it is not the kind of thing anyone volunteers. It should form part of your written diligence questions.