GP Practice Finances: what to review before year end

By Nita Kotecha, Senior Manager, Healthcare

The 2026/27 contract brought more money into general practice. It also brought more obligations, more staffing complexity, and structural changes to how practice income arrives. For practices that have not yet modelled what that means for their actual cash position, the months before year end are the right moment to do it. Some of it is easier to get wrong than it looks.

Does the uplift actually cover the cost increases?

For some practices, yes. For many, not comfortably. The headline is a 3.6% cash increase to the core GP contract, taking total investment to £13.863 billion nationally. In real terms, after inflation, that is 1.4%. The gap between those 2 figures is where the pressure sits, and most practices will have felt it before the year is half done.

The Global Sum per weighted patient rises from £123.34 to £130.07. The QOF point value increases from £225.49 to £227.95. These are not trivial movements. But they land against staffing costs that have moved faster. Employer National Insurance rose to 15% in April 2025. Public sector bodies received compensation for that increase. GP practices, classified as businesses for this purpose, did not. The BMA has estimated the annual cost to practices in England at somewhere between £180 million and £200 million.

Whether the 2026/27 uplift absorbs that depends entirely on a practice’s staffing mix, and that calculation is specific to each practice. A partnership with a large employed team and a high proportion of staff near National Insurance thresholds will feel it differently from one with a leaner structure. Staffing remains the largest single cost line for almost every practice, and modest movements in salaries, pension on-costs, or employer National Insurance compound quickly across a full year.

A practice running a rolling budget, updated against actual performance each month or quarter, will see that movement early enough to respond. A practice working from a budget set in February, before the contract detail was confirmed, may be operating on assumptions that no longer hold.

Is the GP Reimbursement Scheme new money?

No. It is a reimbursement of expenditure, and treating it as anything else creates a cash problem later in the year.

The most significant structural change this year is the repurposing of the £292 million Capacity and Access Payment. Under the previous arrangement that money flowed to Primary Care Networks to support access and improvement activity. From April 2026 it flows directly to individual practices under the new practice level GP Reimbursement Scheme, at a funding entitlement of up to £4.57 per practice adjusted population. On its own terms this is a sensible correction. Control over the money returns to where most clinicians believe it should sit.

The detail that matters is what the scheme actually pays for. It reimburses the cost of employing an additional salaried GP, covering salary together with employer National Insurance and pension contributions. It does not generate a surplus. If a practice recruits under the scheme and those sessions do not produce income above their employment cost, the scheme breaks even at best. The conversations I have with practice partners suggest the scheme is sometimes being read as additional income rather than a cost offset, and that distinction has real consequences for how the year ends.

The practical implication is for drawings. Practice income from April 2026 is genuinely higher, but drawings should not rise until the full year cash flow effect of the new payment structures is understood. Drawings set against income that turns out to be matched by cost take time and difficulty to unwind.

‍

"The scheme reimburses the cost of employing a GP. It does not create surplus. Drawings should not move until the full year cash flow picture is clear."

‍

Is your payroll structured correctly for ARRS claims?

It needs to be right from the first pay run, because correcting it afterwards is considerably harder than setting it up properly.

Where a practice is using ARRS funding to recruit a GP or extend sessions, the reimbursement covers salary at the top of the DDRB salaried GP pay range plus employer on-costs for National Insurance and pension. The 2026/27 maximum reimbursable rate has risen substantially, to £152,900 nationally and £155,698 in London, which makes ARRS GP posts far more competitive with direct salaried employment than they were.

The risk sits in classification. If employment on-costs are not captured separately and correctly in payroll from the outset, reconciling claims against payroll records becomes difficult. Retrospective reclassification is possible but it is slow, it invites queries from the ICB, and in the worst case it leaves a practice unable to evidence a claim it was entitled to make. This is an administrative point with a financial consequence, and it is worth 20 minutes with whoever runs the payroll to confirm the structure is right.

Practices within the same PCN can also transfer funding entitlements to each other under the scheme, using the Transfer of Financial Entitlement form submitted to the ICB. Where the £4.57 per adjusted population does not stretch to the sessions a practice actually needs, pooling entitlements across the network may be more effective than absorbing a shortfall alone. That is a conversation worth having with neighbouring practices rather than assuming the entitlement is fixed.

What changed with Advice and Guidance and QOF?

Advice and Guidance funding has been embedded into the core contract, which means it is no longer a separate income line to track. It sits within the global sum.

Administratively this is simpler. Analytically it is harder, because the funding is now invisible against the activity it supports. Where Advice and Guidance volumes are rising, and in most areas they are, the question of whether that activity is being adequately funded becomes difficult to answer from the accounts alone. Practices that want a clear view will need to track the activity separately even though the income no longer arrives separately.

On QOF, practices that opted into the quality improvement programme should have notified their ICB and set up the corresponding monthly accrual in the accounts. If that accrual was not established, or was set at the wrong value, the position will not reconcile at year end. It is a small check now and a larger adjustment later.

What a year end review should cover

A review at this point in the year does not need to be elaborate. It needs to answer a short list of questions honestly.

Is actual income tracking against what the contract changes indicated? The Global Sum uplift, the reimbursement scheme entitlement, and any enhanced service income should all be visible and identifiable in the practice accounts. A payment that has not arrived, or has arrived lower than expected, is far easier to query now than at year end.

Are staffing costs modelled across the full year? Employer National Insurance at 15%, NHS pension employer contributions at 14.38% of pensionable pay with the balance funded centrally, and any salary movement flowing from the pay assumption should all sit in the forecast rather than being discovered in the accounts.

Are partner drawings set at a sustainable level? This is the most sensitive question and the one most often deferred. Drawings pitched above what the practice is actually generating create a problem that takes months to correct. A partnership that models this now has options. One that discovers it at year end has considerably fewer.

Is the practice forecasting on a rolling basis or working to a static annual plan? A rolling budget gives much earlier sight of where the year is going, and most cloud accounting platforms make it straightforward to maintain. The time investment is modest against the value of knowing early.

In the practices I work with across the Midlands, the difference between a comfortable year end and an uncomfortable one is rarely the contract itself. It is whether anyone looked at the numbers in time to do something about them. None of these questions require specialist knowledge to ask. The answers, and what to do with them, are where an accountant who understands general practice earns their place.

If your practice has not reviewed its financial position against the 2026/27 contract changes, it is worth doing before the year moves much further on. I work with GP practices across the Midlands on this kind of planning, and a conversation at this stage almost always surfaces something worth knowing. There is more on how we support practices at ballardsllp.com/sectors/healthcare

‍

This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.

‍