Objective To examine the reasons why practices exempt patients from the UK Quality and Outcomes Framework pay for performance scheme (exception reporting) and to identify the characteristics of general practices associated with informed dissent. Design Retrospective analysis. Setting Data for 2008-9 extracted from the clinical computing systems of general practices in England. Participants 8229 English family practices. Main outcome measures Rates of exception reporting for 37 clinical quality indicators, associations of patient and general practice factors with exception rates, and financial gain for practices relating to their use of exception reporting. Results The median rate of exception reporting was 2.7% (interquartile range 1.9-3.9%) overall and 0.44% (0.14-1.1%) for informed dissent, but variation in rates was wide between practices and across indicators. Common reasons for exception reporting were logistical (40.6% of exceptions), clinical contraindication (18.7%), and patient informed dissent (30.1%). Higher rates of informed dissent were associated with: higher numbers of registered patients, higher levels of local area deprivation, and failure of the practice to secure maximum remuneration in the previous year. Exception reporting increased the cost of the scheme by 30 pound 844 500 ((sic)36 877 700; $49 053 200) (0.58 pound per patient), with two indicators accounting for a quarter of this additional cost. Conclusions The provision to exception report enables practices to exempt dissenting patients without being financially penalised. Relatively few patients were excluded for informed dissent, however, suggesting that the incentivised activities were broadly acceptable to patients.