To help practices schedule various finance matters in the coming months, James Gransby, head of our medical practices team, recommends actions to attend to now and gives a month-by-month lowdown of what’s coming up for 2021.
Key things to turn attention to now include:
- It is probably an ongoing project but ensure all Covid-related claims have been made to your CCG or are in the process of being made.
Remember the BMA reclaim toolkit (developed in conjunction with AISMA) can be found here.
- Take time to understand the financial impact that the coronavirus has had on the practice finances in the period to date and how the new contract and income protection measures will affect your practice for the rest of the year. This will highlight any cash flow problems and help you to assess if partner drawings need to be adjusted.
- Seniority has now stopped but what about finalisation of previous years’ over/under payments? If these have not yet been reconciled then beware, particularly when paying out former partners’ capital balances, unless these sums have been reserved for as a creditor in the accounts.
- Did you furlough any staff and was this correct?
Following the Finance Act 2020 passed on 22 July, any claims made have a 90-day correction window if an employer is to avoid penalties – there was a deadline of 20 October for previous claims to be repaid.
- The Bank of England Base Rate is the lowest it has ever been at 0.1 per cent – now could be a good time to consider refinancing practice or property loans.
A conversation with the bank could prove worthwhile as it is unlikely to come forward to tell you that you can save money. Taking the initiative to approach the bank could save money in the long term, even after paying any early redemption penalties which may apply.
- You may be considering a strategic review of how your premises are used in future. For example, are you planning to reconfigure them if you anticipate fewer face-to-face consultations longer term? Upgrading broadband speeds, where possible, may also be front of mind for the surgery and looking at IT infrastructure generally. Be alert to any grants available for this.
- For owner occupied premises, have you done a review of past capital allowance claims to ensure you have not missed out on tax relief which is waiting to be claimed? This may give a much-needed reduction to tax liabilities in the coming year if a claim is possible.
- Ongoing issues with NHS Propco properties regarding leases and facilities management charges might be affecting your practice so ensure money remains kept aside for when these issues are settled in future. And persevere with any ongoing conversations to try to reach a conclusion where you can.
The new to partnership premium of £20,000 is now in force so remember to mention this in conversations you may be having with those you wish to become future partners.
You are now able to make the claim for new partners who have joined your practice since April 2020. An up-to-date partnership agreement is one of the prerequisites of the funding and so speak with a specialist medical solicitor about a new partnership agreement. Any new agreement should mention how the £20,000 funding is treated and would benefit from covering such matters as Final Pay Control liabilities if they arise.
Note the dates
January 2021 – Partners’ tax bills are due this month. I am sure this is etched into the memories of partners but make sure whoever pays this liability has the money ready and accessible in time to pay the charge. A small number may have deferred their 31 July 2020 tax ‘payment on account’ instalment too and so this will also be due, adding to the quantum of tax payable.
February 2021 – Submission of the partners’ superannuation certificates must be made now for there to be enough time for them to be processed as part of the March global sum payments. This is essential in order to get the tax relief in the correct tax year.
It is also a good time to remind salaried GPs to do their Type 2 certificates. The estimates of 2021-22 pensionable profits are also due to be submitted soon and doing so in order for the correct payments to be made from April onwards is important.
March 2021 – For any partners who had a pensions Annual Allowance tax charge in the 2018-19 tax year, 31 March 2021 is the extended deadline for submission of the completed Scheme Pays Election (SPE2 form). The deadline would normally have been 31 July 2020 and it is possible that your accountant or IFA have already undertaken this for you (worth a check just in case).
It is nearly time to submit the Scheme Pays election for 2019-20, due in by 31 July 2021. This is particularly important as the 2019-20 tax year has a mechanism by which the Government will cover the charge for you but only if the Scheme Pays form is submitted in time.
March 2021 – The Stamp Duty Land Tax (SDLT) holiday for residential properties ends this month and so it is a last chance to consider inter-spouse transfer of property to secure future Income Tax relief with no SDLT (namely on a mortgaged property).
March 2021 – If your practice has a 31 March year end now is the time to remember to perform a stock take and start to get your accounting records ready to pass to us. This is also the month to check that superannuation adjustments have been made accurately based on the submitted certificates.
March 2021 – If you are involved in a PCN and there are unspent elements of the £1.50 or Impact and Investment Fund money then now would be a good time to spend it, or commit to a legal obligation to spend it at year end to ensure that it does not become part of a year-end surplus to be taxed.
These recommendations highlight some items you may wish to be think about in your planning, but it is far from exhaustive. Keeping in close contact with your RSM contact throughout the year to navigate the various deadlines is as important now as it has ever been.
If you have any questions about your finance planning, please contact James Gransby.