Veterinary accountants are dealing with an ordinary trading business. The questions that matter to you as a practice owner are commercial ones: how your practice is structured, what the profits are taxed at, and what happens when a corporate group makes an offer. Very little of the NHS machinery that governs a doctor's finances applies here, and the three differences below are worth stating before anything else.
What is different about veterinary practice tax?
Your practice holds no NHS contract, so every pound of income is a private fee billed to a client, a pet insurer or a farm business, and you carry the credit risk on all of it.
Your fees to clients are standard-rated for VAT at 20 percent, because the health exemption in VATA 1994 Schedule 9 Group 7 covers human health registers only, which reverses the position in the guide to GP VAT registration.
Vets are not members of the NHS Pension Scheme at all, so your retirement provision is whatever the practice puts in place, rather than the accrual described on the NHS Pension Scheme guide.
Those three facts move the conversation onto ownership. With no state contract underwriting the income and no state scheme building a retirement, the value you accumulate is in the business itself.
Who owns the UK's veterinary practices now?
The Competition and Markets Authority published the final report of its market investigation into veterinary services for household pets on 24 March 2026. It found that over 60 percent of veterinary practices are currently owned in whole or in part by six large veterinary groups, and that in 2013 just 10 percent were owned by large groups.
Scale is concentrated at the top. The largest group, IVC, has over 900 first-opinion practices in the UK, the smallest of the six has around 180, and the next largest veterinary business after them owns 38. Independence remains numerically normal: 76 percent of veterinary businesses have only one practice, and they run 20 percent of all first-opinion practices.
For an owner, that is a market fact with a direct commercial consequence. There are active, funded, repeat buyers for a well-run practice, so an approach is a normal event rather than a rare one.
What does a corporate group actually buy?
The shape of a practice transaction, goodwill, capital accounts and incorporation, is the shape already covered by the private-practice material on this site, starting with selling a private practice and claiming Business Asset Disposal Relief.
The structural difference is that veterinary goodwill is freely saleable. Nothing prohibits it, so the biggest single number in your deal is usually goodwill: the transferable value of the client list, the referral relationships, the trading name and the staff who stay. A buyer is paying for revenue that survives your departure, which is why almost every offer ties the seller in afterwards.
Alongside goodwill sit the tangibles. Equipment carries capital allowances that follow the pool value on a transfer, and your premises are often held outside the trading entity, so they can be sold, retained and rented back, or left out of the deal. Each choice changes both the price and the tax.
How the price on a practice sale is usually structured
Offers for veterinary practices are rarely one cash number. They are commonly a completion payment, a deferred element, and an earn-out that depends on how the practice trades after you have gone. Each part is taxed differently, and the differences are about timing rather than rate.
| Part of the price | What it is | Capital gains tax treatment |
|---|---|---|
| Cash on completion | Paid when the contract completes | Included in disposal proceeds for the tax year of the contract |
| Fixed deferred instalments | Amount known, payment later | Included in proceeds in full at the date of disposal, even though unpaid |
| Cash earn-out | Amount depends on later performance and is unknown at signing | The right to it is a separate asset, valued at the date of disposal, and that value forms part of proceeds |
| Shares or loan notes in the buyer | Consideration in the acquiring company's securities | TCGA 1992 section 138A can treat the earn-out right as a security, so the gain rolls into what is issued instead of being taxed at once |
The rate that applies to the gain is 18 percent under Business Asset Disposal Relief on disposals from 6 April 2026, up from 14 percent in 2025/26, capped at £1,000,000 of qualifying gains per person for life. Gains above that limit are taxed at 24 percent for a higher-rate taxpayer, and the annual exempt amount for 2026/27 is £3,000.
How much tax on a £1m practice sale with an earn-out?
Take Mr A, a vet who owns all the shares in his practice company and sells in 2026/27. The figures are illustrative and rounded. He receives £900,000 in cash on completion and an earn-out whose right is valued at £150,000 at the date of the contract. His base cost in the shares is £20,000.
Proceeds are £900,000 plus £150,000, which is £1,050,000. Deduct the £20,000 base cost and the gain is £1,030,000.
The first £1,000,000 uses his Business Asset Disposal Relief lifetime limit and is taxed at 18 percent, which is £180,000. The remaining £30,000 is reduced by the £3,000 annual exempt amount and taxed at 24 percent, which is £6,480. Total capital gains tax is £186,480 on the 2026/27 disposal.
What changes the answer: if the earn-out eventually pays more or less than the £150,000 valued into the sale, the difference is a further gain or loss on the right itself, not a correction to the figure above, and HMRC's Capital Gains Manual at CG14970 is clear that the later disposal of the right does not qualify for further Business Asset Disposal Relief.
Free Incorporation and private practice tool
Model your tax saving from incorporating your private practice
Our interactive tool is built for a larger screen. Tell us your situation and a specialist medical accountant will send your figure and the sensible next step, with no obligation.
Get a free specialist review
Tell us about your situation and a medical accountant will review your position and confirm the next sensible step, with no obligation.
Want this checked against your specific situation?
Leave your details and a one-line summary. A specialist medical accountant will reply within 24 hours, with no obligation.
Why an earn-out can be taxed before you are paid
The reason sits in an old case, Marren v Ingles, and it is the single most expensive thing to misunderstand in a veterinary deal. A right to receive future consideration whose amount is unascertainable is itself an asset, a chose in action, and it is chargeable in its own right.
HMRC's Capital Gains Manual applies that directly. The right is valued at the date of the sale and that value goes into your disposal computation. Each later payment is then a disposal or part disposal of the right, with the value already brought in as its acquisition cost.
Two practical consequences follow. First, your tax on the valued right is due on the normal 31 January date after the tax year of the contract, whether or not any earn-out cash has arrived, so plan for the gap.
Second, if the practice underperforms and the earn-out pays less than the valuation, the shortfall shows up as a loss on the right in a later year, which is not always a loss you can use.
What should you establish before you reply to an approach?
An approach usually arrives informally and the tax outcome is decided long before anything looks like a contract. Six things are worth pinning down first.
- Whether the offer is for shares or for the business and its assets, because the routes give different results and the buyer's preference is not automatically yours.
- How much of the price is contingent, and on what measure it is calculated.
- Whether the premises are inside the deal, retained and let, or sold separately.
- Whether the Business Asset Disposal Relief conditions have been met throughout the two years ending on the disposal date, including the 5 percent shareholding and voting rights and officer or employee status on a share sale.
- How much of the £1,000,000 lifetime limit any earlier disposal has already used.
- What the tie-in period requires of you, since a post-sale employment or consultancy term is taxed as income, not as part of the capital gain.
Registration with the Royal College of Veterinary Surgeons attaches to the people rather than to the business. Practice Standards accreditation is voluntary and held by around 69 percent of UK practices, and a buyer will expect it to survive the transaction. That is your own regulatory ground rather than an accountant's, but confirm it early, because it forms part of what is being valued.
Is staying independent still a real option?
On the numbers, yes. Single-site ownership is still the most common structure in the sector, even though the six groups now hold most of the capacity, so a buyer is an option rather than an inevitability.
The cost side is where the CMA's remedies bite, though not evenly, and the difference matters if you run a single site. Price publication is the broad one: a business operating one or more first-opinion practices will have to publish prices for a defined list of common services, online and in the practice, and share that information with the RCVS. The ownership display remedy is narrower. It is aimed at businesses running more than one first-opinion practice, or a combination of practices and other veterinary services, so a genuine single-site independent falls outside it while still carrying the pricing work.
Timing softens the blow. Animal charities providing small animal veterinary services are not generally expected to comply at all, compliance is tiered by size, with businesses of 15 or more practices expected to comply from December 2026 and smaller businesses given until March 2027, and none of it binds anyone until the CMA makes the Order, which it has said will be in place by 23 September 2026.
Against that, the tax position of a profitable independent is well understood. Corporation tax runs at 19 percent on profits up to £50,000 and 25 percent above £250,000 for the financial year beginning 1 April 2026, with a marginal rate of about 26.5 percent between. Dividends are taxed at 10.75, 35.75 and 39.35 percent for 2026/27, and the £1,000,000 Annual Investment Allowance covers most equipment spend outright.
The decision is rarely about this year's tax bill. It is about whether the value you are building has a buyer when you want one, and on current market structure it does.
If a group has approached you, or you want to know what the practice is worth in a sale, our work covers the structure, the earn-out modelling and the capital gains tax position before anything is agreed. Get in touch to arrange a call.