Tax Planning
Tax Planning for High-Earning Doctors and Dentists: The Traps to Avoid
The NHS pension annual allowance gets the headlines, but high-earning doctors and dentists face several other tax pitfalls. The big ones: the loss of the personal allowance between £100,000 and £125,140 (an effective ~60% rate in that band), how private practice or associate income is taken and structured, and simply not using the allowances available each year. None of this is about tricks — it's about not paying more than you need to, within the rules.
The £100k personal allowance trap
Once income passes £100,000, your tax-free personal allowance is withdrawn by £1 for every £2 above that, disappearing entirely at £125,140. The effect is an effective marginal rate of around 60% on income in that band. For consultants taking on extra sessions, or GPs and dentists with rising profits, planning around this band — often using pension contributions within the allowance rules — can be worthwhile, but needs modelling alongside the NHS annual allowance.
Private practice and associate income
Doctors with private work and dentists with associate or practice-owner income often have choices about how that income is taken and structured. The most efficient approach depends on your overall position and should be set up with both tax and long-term planning in mind — usually in coordination with your accountant, who handles the compliance, while a financial planner focuses on the saving and investment side.
Use your allowances before the tax-year end
Pensions, ISAs and other allowances reset annually and are easy to underuse when you are busy. Making deliberate use of them, in the right order, is one of the simplest ways to improve your position over time. A specialist adviser can help you build this into a plan rather than a last-minute scramble each March.
This article is general information for medical professionals and is not personal financial advice. Figures relate to the 2026/27 UK tax year and may change. Professional Medical Financial is an introducer that matches you with FCA-regulated advisers; any regulated advice is provided by those firms. The value of investments can fall as well as rise. Your home may be repossessed if you do not keep up mortgage repayments. NHS and other defined-benefit pensions provide valuable guaranteed benefits and transferring out is unlikely to be suitable for most people.
Frequently asked questions
Between £100,000 and £125,140 of income, your tax-free personal allowance is gradually withdrawn (£1 lost for every £2 over £100,000). Combined with higher-rate tax, this creates an effective marginal rate of around 60% on income in that band.
Often yes — within the rules, pension contributions reduce taxable income and can restore some personal allowance, but the NHS pension annual allowance must be considered first. This is a point to model with an adviser and your accountant.
No. Financial-planning advice complements your accountant, focusing on tax-efficient saving, pensions and investments alongside the tax compliance your accountant handles.