Accounting in PCN's

Lentells Medical Division





Although the PCN is not a separate legal entity we would recommend that accounts are prepared for transparency.   For all practices in the PCN, there will be an independent record of the income and expenditure of the PCN and the allocation of the income and expenditure between the individual practices.


The PCN accounts should be prepared on an annual basis and, as with partnership accounts, the PCN accounts should show the income and expenditure received into the PCN, the year end position (balance sheet) and the allocation of income and expenditure between each member practice.  This allocation should be made using the method agreed in the PCN agreement, but for most PCN’s, this will be on a capitation basis.


Where income is committed to be spent in the following year, it is possible to carry this forward into the next PCN accounts year.  However, the usual accounting rules follow and it must be clearly demonstrated that there is a specific spending commitment which applied at the end of the year.  


If, there is a profit at the end of the year, PCN’s may pay this out to member practices or keep it in the PCN.


The individual practice accounts will be required to show their share of the PCN income and expenditure.


Any profit is taxable (irrespective of whether it has been paid to the practice by the PCN) and the income and expenditure are to be taken into account in the superannuation calculations.