Setting up a Complementary Practice
Once qualified, the reality of setting up a complementary practice can be a little overwhelming. It’s scary, how many established practitioners don’t have the basics in place, many of which are designed to protect them.
Before I get started, I am not a qualified accountant or solicitor and information is provided based on my experience and the UK market. Please seek professional advice before making any decisions. These considerations are provided to give you an overview.
Decide Your Business Structure
This will define your legal responsibilities such as paperwork, taxes, how personally you receive profit. It also defines your personal responsibility, should the business make a loss.
Most practitioners are self-employed, or sole traders. You are responsible for the running of your business, you bear the risks and take the profits or losses. As a sole trader, you can employ staff, it doesn’t mean you have to work alone.
This is an organisation that you set up, to run your business. A limited company is responsible, in its own right, for everything it does. Its finances are separate from your personal finances. Company directors aren’t personally responsible for debts the business can’t pay, if it goes wrong, as long as they haven’t broken the law.
Two or more people work together under a partnership agreement. The relationship is outlined in the agreement as well as the share of the risk and reward.
An organisation that applies commercial strategies to maximise improvements in human and environmental wellbeing, rather than maximising profits for shareholders.
More information on business structures can be found here.
Register with HM Revenue & Customs (HMRC)
This is a legal requirement, whatever your business structure. You are required to submit tax returns and pay National Insurance and income tax as part of running your business. The Government website has full details and you can register there too.
Professional Body Requirements
Your professional body will have a ‘Code of Conduct’ you will have to work to. Depending on your discipline, you will also need to follow the guidelines of certain agencies such as the Medicines and Healthcare Regulatory Agency (MHRA).
If you belong to more than one professional body, work on the side of caution and follow the one with the strictest regulations.
Register for Data Protection
The Information Commissioners Office (ICO) was set up to uphold information rights in the public interest. As a business owner, you have a responsibility to look after the data in your possession. The General Data Protection Regulations (GDPR) and Data Protection Act 2018 (DPA 2018) cover your legal responsibilities to manage the data you hold. This is a very quick overview of the six principles:
- Look after personal data you hold in line with these principles and any other laws that apply, ensuring you do it in a fair and transparent way that is clear to the individual(s) involved.
- Communicate exactly what you are using the collected data for and use it for that reason only.
- Only collect the data you need for the purpose and nothing more.
- Be careful to collect accurate data and if there are any mistakes, correct them quickly.
- Only keep the data while you need it and safely delete it when you don’t.
- Be responsible in the way you hold data and take measures to keep it safe.
The benefit to individuals is, they have more choice over how their data is used. As a business, you have robust systems and are protecting yourself. It is your legal requirement to sign up for data protection, it takes minutes and isn’t expensive so register here now.
In today’s society, we have warnings on bags of peanuts stating: “this bag of nuts, may contain nuts”! Seriously!!! It’s crucial that you are fully insured before you start working with clients, even if you’re a student practitioner.
Insurance is there to protect you, your clients and the public. In the event you have a complaint made against you, your insurer is there to advise and support you.
It’s important you have the right cover for business. For example, if you work from home, your home contents insurance is unlikely to cover anything related to your business.
Different types of insurance include:
Professional Indemnity Insurance
This is to protect you if a claim is made against you for injury or loss resulting from the modality you practice. This needs to cover you, wherever you choose to work.
Public Liability Insurance
This will protect you if a claim for injury or loss is made against you by a third party. It is known as the ‘trip or slip’ cover, so you are protected if an unforeseen accident occurred. If you work in a clinic, they may have the cover, but this will only protect you if the owner is deemed legally liable.
Employer Liability Insurance
If you employ staff, this will protect you against claims from an employee.
Content and Buildings Insurance
This will protect you from theft and damage to, or from your property as it does with your house insurance at home.
These are you, setting out your metaphorical stall. They are the rules of engaging with you and are there to protect you and your business. If you can’t afford to employ a solicitor, you can join a body like the Federation of Small Businesses (FSB) or Chamber of Commerce. You can also purchase these online but check the credentials of the company you’re buying them from.
Again, this is about making sure the rules of engagement are set out in advance. They include everything from the expectations of the relationship to outlining the service and payment terms.
Health and Safety Executive (HSE)
HSE provides the regulatory framework for health and safety within the workplace. You are responsible for health and safety in your business. The laws are there to protect you, your employees and the public from workplace dangers. If you have under five employees you don’t have to write down your risk assessment and health and safety policy but it is good practice to have them whatever the size of your business. Website
Your finances need to be kept separately from your personal finances. You need to ensure you get a business bank account so that you have the functions you need to run your business efficiently such as taking card payments.
There are many hats you have to wear as a practitioner. It is important you make sure you have secure foundations in place to allow your business to flourish.
Contact me to find out how I can help you set up your complementary practice.