Starting a Private practice can be a daunting task. Below will detail the checklist for starting in Private Practice in the UK from a legal and business point of view. It will walk you through a step-by-step guide of how to set up your new business in the UK. If you’ve already started you can go through and tick off everything. We’ve created a handy checklist for starting in Private Practice download which you can get for free HERE.
Choose a Legal Structure
When you decide to start in Private Practice there are some decisions that need to be made legally.
What Legal Structure is your Private Practice going to be? You can set up as a Sole Trader or as a Limited Company. You can read all about setting up as these legal entities on the HMRC website by clicking the links above.
It’s simpler to set up as a sole trader, but you’re personally responsible for your business’s debts. Most therapists start out as a Sole Trader as reporting your earnings is far easier. Setting up as a sole trader is also quicker and cheaper to get started.
Register with HMRC
Once you have decided which type of structure your company is going to have you will need to register your company with HMRC.
You will need to Register as a Sole Trader and for Self-Assessment. If you don’t register in time you could be fined. You are responsible for reporting your earnings every year. You must register by 5th October in your business’s second tax year. I would suggest registering as soon as possible once you have decided to start in Private Practice. When you register online and be given a Unique Taxpayer Reference (UTR) number. Keep this safe as you will need it each time you log in to your account.
If you decide to set up a Limited Company Gov.uk has a Step by Step Guide which you can follow yourself or you may want to ask an accountant to complete this process for you. I would suggest contracting an accountant to assist you with your business finances if you choose to go down this route.
Choose a Name
This can really stump some people! If you are a sole trader you can work under your own name and have a trading name; example Simmons Counselling or Talking Therapies. Legally you do not need to register the name but I would recommend doing some internet searches to see if anyone has the name you’d like to use. This would include a general Google search, a domain search and social media. By not doing your research you could get confused with someone else. You also may not be able to have a website in the name you have chosen.
For Limited Companies the rules are different as you do need to register your company name. You will need to check if the name is available on the Companies House Register. I would also suggest doing the above internet searches. There may be a sole trader with the name you want to register already set up with the domain and social media handles.
Once you have chosen your name the next thing you will need to do is have a business address. If you will be working out of a physical office location you should be able to use that address for all your business address needs. This would be on invoices, online registers, letter heads etc.
If you will be working from your home and do not want your home address available for everyone you do have some other options:
PO Box (for Sole traders)
There are a few options from a FREE PO Box with P-A-Y-G letter option. This solution is free unless you receive any mail to the PO Box and then there is a charge each time for them to notify you and then they’ll be an additional charge if you want that letter scanned so you can “receive” it.
There are lots of Virtual Office suppliers online. Choose a location near to where you are working. You can then use that address for all your business needs.
If you have an accountant you can ask them if you may use their address as your registered company address for mail and/or online presence.
Separate Bank Account
I talked about the importance of this in my Bookkeeping blog. Before purchasing anything for your business it is important to set up a new bank account separate from your other finances. If you are a Sole Trader you can open a personal account however if you are a Limited Company this will need to be a Business Account. Speak to your current bank to see if they can give you better rates.
You can also check online banks like Starling. They are quick and easy to set up with no fees. You can manage everything from an app on your phone. I also like that you get a notification when someone makes a payment into the account and when you have direct debit payment due.
When working in private practice it is advantageous to already be affiliated with a professional body by being a member and ideally working towards accreditation or already accredited. This however is not legislated. Membership and accreditation show potential clients that you work and adhere to standards for best practice and helps them make an informed decision when choosing a therapist as well as access to a complaints procedure if ever needed.
Professional bodies offer CPD, advice on best practice and enhance your business profile amongst many other benefits. Being registered with a governing body says you are very committed to your profession and have been trained appropriately.
In addition, if you want to work with medical insurance companies, you will need membership and accreditation with the relevant professional bodies such as UKCP or BACP.
The next thing to set up is your insurance. Some providers for Private Practice are Balens, Hiscox and Towergate. You should speak to them to discuss your insurance needs. Ensure to get quotes from multiple sources and get the appropriate advice for your practice.
The ICO is the UK’s independent authority set up to uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals.
You will need to become a member of the ICO when you start in Private Practice. You can take the quiz to see if you are required to become a member. This will also tell you what fee level you will need to pay. I would suggest doing this the first time you register.
The minimum level is £40 per year and this is what most therapists in Private Practice will need to pay. You can register for the first time here.
If you have any GDPR queries or concerns you will be able to contact the ICO for advice and guidance once you become a member.
It can be overwhelming to read through all the information and think about setting up your new business but we are here to help. You can get your handy checklist for starting in Private Practice download for free HERE.
If you get our download you will be on our mailing list where we will email you weekly with a new blog all about Private Practice. You can like and follow our Facebook Business Page. We post daily with tips and video demonstrations of different systems.
If you’d like a Practice Audit you can book that by contacting me. We can talk through your ideas for the practice and I can offer some personal guidance.
There are lots of other ways we can work together. Check out my website to find out more!