Things to consider when you work as a Clinical Psychologist in private practice
When I decided to start my own private practice, it was freeing and exciting, but there was a lot of googling involved.
For those clinical psychologists who are considering working privately, I thought I would download from my brain what I've learnt so far. This is in no way an exhaustive list, so if you think I've missed something, please let me know.
Let’s start with Business Basics
- Sole Trader vs Limited Company
If you’re a small company who only risks time as a commodity (i.e., I don’t need to buy products or stock), then start as a sole trader as it is tax-wise simpler and more beneficial.
But if you get bigger, than supposedly the tax benefits are better as a limited company (earning £40k+)
If you want to know more about pros and cons: https://www.companiesmadesimple.com/sole-trader-v-limited-company.html
Some people have said that you should have an accountant to set up a limited company but the government website says it is ok to do yourself.
You have to pay VAT if you plan to earn more than 80k/year as a company.
You need to register a sole trader with the government and for yearly self-assessment. Really easy. The tax self-assessment takes a bit longer and is tedious so make sure you make time for it.
You may not want to trademark your company which is fine, but it would be worth searching if anyone else has already trademarked your name or company name – say you’re working for 6 months, built up a client base and then you get a ‘cease and desist’ letter because you are using a trademarked name – it’s annoying to have to change all your paperwork etc.
Balans and Towergate have been suggested but there are loads, just google it, its roughly £50-£70/year.
- Information Commission Registration
https://ico.org.uk/ -- you can do an online test to see whether you should registration.
- Registration with insurance companies
Some insurance companies require you to be 5 year post-qualification to sign up with them, however, that includes your undergraduate so you may still qualify for it. See lower down “how to get referrals” for how to sign up.
- Logos etc
Canva is a free app and makes everything super easy.
- Keeping up with Taxes
Keep all receipts – take photos!
According to Money Saver Martin Lewis, you can claim £6 a week easily for working from home, any more and you have to provide evidence – you do this on your tax claim at the end of year.
I use quickbooks for incoming/outgoing as it also sorts my taxes – I also link this directly to my business bank account so takes out a lot of the leg work. However, this is optional (and roughly £10/month after the initial deals).
Anything you earn – put aside 30% for taxes. So when you’re charging, think about what money you want to take home, and then add on from there for taxes and expenses. Unless you opt for your taxes to come out of your NHS wage (if you’re still working in NHS).
Some online banking apps also invoice, or accountancy apps like QuickBooks BUT you can also find free templates online.
Make sure you're clear on your payment terms (such as within 90 days etc).
They must be kept locked away. Easiest thing is to not put any names on your computer. Just have it on paper and lock it away.
Practice management software option - £35/month – organise notes etc and stay GDPR compliant. Lets clients book in directly. Its called Write Up.
This works the same as NHS in terms of documenting risk assessment, contacting GP if you feel it is necessary and to share responsibility, signposting to A&E when necessary. If you have quite high risk client group, you may find yourself doing additional unpaid work liaising with NHS services at times of crisis so hold that in mind.
You need it monthly and make sure you keep records of it in case you are spot-checked.
Supervision groups with peers is helpful and cost-efficient.
You can also supervise a friend who supervises you in return – another cost efficient way.
Otherwise private supervision is roughly £70+ per hour, so you need to account for this in your expenses and when setting prices.
It’s a lot more simple for taxes if you have a separate business account – I used Tide.
I was advised to keep my private income on a spreadsheet and split into 3 columns:
1. Tax (30%)- This is likely to be too high in terms of tax but better to have too much at the end of the year for the tax bill than a nasty surprise.
2. Investment back into company/Expenses (30%) [includes money for CPD]
3. Take-home pay (40%)
Your first £1000 as a sole trader is free of tax, regardless if you work in another job- So if you just do the odd piece of work, there is no need to declare it according to the Government website.
You don’t necessarily need an accountancy app, you can do it yourself. It depends on how many expenses you have and how good you are at keeping track. I use QuickBooks which is £3 a month on trial then £9.60 a month (which comes out of your taxes anyways).
When doing a tax return, you can opt to pay tax separately (hence keeping the 30% aside), or if you’re working NHS part-time, they can take it out of there for you instead.
Josephine Hughes has lots of helpful resources including how to set prices: https://josephinehughes.com/how-to-set-your-private-practice-fees
Look at what you need to charge to cover expenses AND make an income that you are comfortable with – this includes both trainings etc and clients.
Look at what others around you are charging.
For example, you could easily charge a corporation £1k for a training but charity would be different.
With trainings, remember to charge for the time for preparation of the material. You want to charge enough that you have the time and brain space to give them your best, rather than rushing it because you need to make money elsewhere.
Clinical Psychologists tend to charge the most for 1:1 therapy so look at other Clin Psys, not other psychotherapists or counsellors. But then again, depends on what you can afford to charge but don’t undervalue yourself – you are very good and that should be represented in your cost.
You can always offer a sliding scale cost, such as £1/£1.50/£2 per their income. So someone on £20k would pay £20/£30/£40 per session. Whereas someone on a £60k income would pay £60/£90/£120 per session. You can also give this a minimum and maximum to cover costs as you wouldn’t want to compromise yourself financially so the minimum someone could pay on the sliding scale is £30 for example (to cover room costs etc) up to £150 per session.
Government website has lots of helpful articles about setting up including free trainings.
Dr Rosie Gildthorpe runs a “do more than therapy” group on facebook for people who want to do more than therapy like get government funding, social enterprise, private work etc. She also has a helpful podcast called “The business of Psychology”.
Natwest do free business training
I rarely encourage things to be googled, but there are loads of helpful business websites out there.
You don’t actually need a website, but you can set them up for cheap, although maintenance is still £100/year for domain names etc.
I use Wix incase you’re looking – it’s website design for people with no experience.
I think it depends if you want to be reliant on a referrals website like psychologytoday.
If you work with corporates, sometimes they like to google you to check you out.
How to get therapy referrals
- Google search
List yourself as a business in the local area
Therefore understanding search engine optimisation for your website and paid advertising on google is worth it
Google give good advice too about business
Use the phrases that people will search for in your heading and blogs. Use tools like key word finders.
Use location – e.g. “waterloo therapy”
Keep it updated
- Referrals from other Professionals is common
When you are at capacity, it is good to refer onto colleagues and then they can refer to you later on when you have space.
There are a few private psychologist facebook groups to share referrals
A strong network can go a long way.
- It's free to list yourself on Yellow Pages and Thomson Directory etc.
- Social media - I'm unsure but I've been told Facebook isn't a strong source of referrals so no need to spend money on advertising.
- Directory websites
Find a counsellor
Find a therapist
- Insurance Companies
HealthCode is an invoicing programme that links you up to all insurance companies
You need to be clear on the terms and conditions for each company before taking on clients - for example there are different caps on fees and payment terms between companies. You wouldn't want to give 12 sessions of therapy for the client to then find out insurance only covered 6 and they have to pay the rest.
From my understanding, you assess and write to them to say the person needs “X sessions of psychological therapy”, and after X sessions you can write a discharge letter or request additional sessions and they tend to agree but there is a limit obviously.
Taking insurance cases can impact on cash flow as their payment terms can be 90 -120 days.
Few specifics to be aware of:
Nuffield Health - Pay monthly and on time.
Rehab companies – usually trauma, looking for CBT and EMDR. Although very low pay rate and long payment terms (such as pay 120 days after final session so can impact on cash flow).
Solicitors - Medico-legal, rehab. There is an expectation that you will always charge them a higher fee as they can be very labour intensive, such as heavy paperwork outside of session time. This also means that you can keep costs down for other non-insurance clients.
Employee Assistance Programmes - consistent referrals but once again, low fees so it depends on what you can afford.
Screen all referrals for difficulty and risk!
If a client could be better suited to NHS services or another clinician, then you need to have this discussion and possibly signpost them. For example, some people may not understand how to self-refer to IAPT and that would be better suited to them.
If you don’t want a referral or don’t have space – signpost them to other nhs and private services.
You will feel like an imposter – it is part and parcel of being a psychologist and setting up your own company.
Working privately is different to NHS – some people use it as more weekly counselling than having any clear goals to work on. This can feel odd and different to what we are used to, especially if you've worked in IAPT, but if that is what they want and what they find helpful then it is their decision – you can’t decide how people choose to spend their money.
Lone working can be "lonely" - find a buddy you can bounce ideas off of, or utilise the social media support groups.
Documents to Consider
Risk Management (incl optional letter to GP)
Confidentiality (incl consent)
Cancellation Policy (24-48 hours is common)
Payment policy (such as 24 hours prior to session if non-insurance)
Inclusivity and Diversity (I get my advice from @thevpwright on insta about how to be an inclusive company)
Communication outside of session (social media etc) in T&Cs or separate
PandaDoc to send proposals to corporate companies
Folder of Resources
Risk, systems and paperwork take a lot of time – just copy (with permission) and adapt someone elses
As I mentioned at the start, this is in no way an exhaustive list and just what I have learnt so far. If there is anything I've missed, or something I've got wrong, please get in touch! I want this to be as helpful for anyone considering private work.