The coronavirus pandemic is affecting the way GP Practices operate, including in relation to their finances.
We have summarised the practical steps that GP Practices should look to take to mitigate the issues, together with the measures currently outlined by the Government to support them at this time.
Claiming additional costs – BMA/AISMA template
Practices are able to claim for additional costs incurred during the coronavirus emergency, the BMA, in conjunction with AISMA, has prepared a template reimbursement claim form. The form is published on this BMA web page.
If you should need any assistance with this then please do get in touch.
Job retention scheme
We’re aware that GP Practices have seen the need to redeploy staff, and in some cases ask them to stay at home as they have no work for them to do presently as the skill mix of staff adapts to current conditions.
An important factor in the Government’s job retention scheme is its approach to Public Sector Organisations. The rules currently state 'Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.'
It is not yet clear whether this precludes GP Practices from using this scheme altogether. As soon as this is known for certain then this page will be updated.
Further details about the scheme and how to apply furlough arrangements are explained here.
Managing your people during coronavirus
For those who can work from home, maintaining communication and transparency will be key in keeping your work force motivated and engaged. Our practical advice on how to manage your staff through these uncertain times can be found here.
Statutory Sick Pay (SSP) reclamation for businesses
GP Practices with under 250 employees will be able to reclaim expenditure for any employee, who for a period of up to two weeks, has claimed SSP because of coronavirus. This includes self-isolation and employees will not have to provide a doctors fit note. As existing systems are not set up to accommodate employer refunds of SSP, the Government is working to set up a mechanism for this. As such, there is likely to be an unquantified delay in receiving the refund.
Suspending payment of employment taxes and other payroll related issues
Managing to account for tax and national insurance to HMRC could be challenging at times like these. You can find details of who to speak to on this and answers to all the frequency asked questions covering employment related information here.
Financial assistance to GP Practices
Local CCGs are communicating with practices in almost all areas now and whilst the situation is different in each area, the fundamental principal of keeping track of additional expenses incurred in relation to the current crisis for future reimbursement is consistent everywhere.
Nationally there are some measures which have been implemented to assist GP Practices, for example:
- CQC inspections have been suspended to ease workload pressures; and
- In relation to the QOF there is a 2019/20 uplift available on amounts received where these are below 2018/19 levels. The level of QOF is protected for 2020/21 and practices will be enrolled automatically rather than the usual enrolment process. Some manual indicators have also been set to 'yes' by default (prescribing and end of life care, 37 points each).
Effect on Primary Care Networks
Primary Care Networks (PCNs) will engage staff in a number of ways, either directly via a payroll if they are set up as a separate legal entity; through a payroll operated by a lead practice; via joint employment (flat practice model); or via a federation.
Whichever way the staff are engaged, the rules will be the same as those applied to GP practices described above.
We were expecting HMRC to give further clarity on their interpretation of the employment status of Clinical Directors before the start of the tax year on 6 April 2020 but this was not forthcoming. As such the advice remains to look at the nature of the engagement and apply the rules within the CEST tool to your own PCN.
The effect of unspent surpluses being taxable on the partners at member practices will still be of concern to many. Our advice on this is to keep track of costs undertaken after the year end to see if they relate to conditions existing at year end and had been committed to (either legally or constructively) at that point. This is particularly relevant with the ongoing costs incurred in relation to coronavirus.
Locum GPs who are experiencing a drop in income
Locum GPs have self employed status and so may be covered by the Self-employment Income Support Scheme (SEISS) if they meet the criteria.
This may be particularly useful for locum GPs who are self isolating or who may otherwise be suffering a loss in income at the present time.
Self-employed individuals will now be able to apply for a grant worth 80 per cent of their average monthly profits over last 3 years, up to £2,500 per month. Although importantly your self-employed trading profits must be less than £50,000 and with more than half of your income coming from self-employment meaning a number may be precluded from claiming based on this condition.
You can find more details of how the Government is helping the Self Employed, including the full list of qualifying conditions here.
Cash flow management and Coronavirus Business Interruption Loan (CBILS)
With significant uncertainty for GP Practices and reports of some Partners not taking their monthly drawings during this time we have summarised some key points regarding general cash flow management here.
By fully understanding their cash flow, GP Practices will be able to assess their available options where there may be a time lag between incurring expenditure and receiving much needed funding from their CCG.
Find out more information on the Coronavirus Business Interruption Loan here.
GPs returning from retirement to front line work - pensions
There are three key changes in the emergency coronavirus legislation relating to NHS pensions.
- The 16-hour rule was relaxed for doctors taking 24-hour retirement.
- The rules on pension abatement were lifted.
- The requirement for some pension scheme members to reduce pensionable pay by 10 per cent if they continue working was suspended.
The 16-hour rule restricted those in the 1995 section of the NHS Pension Scheme to working a maximum of 16 hours per week during the month following 24 hour retirement. There is now no restriction.
Pension abatement affects members of the NHS pension scheme with ‘special class status’, for example GPs with Mental Health Officer status. Special class status allows these members to retire at age 55 years without a reduction in their pension benefits. However, between the ages of 55 and 60, they must not earn more, including their pension benefits, than they did immediately before they retired. This earnings restriction has now been lifted.
Members of the 2008/2015 pension scheme who had elected to draw down a proportion of their benefits and continue working previously had to reduce their pensionable pay by 10 per cent. This requirement has now been suspended.
GPs returning from retirement to front line work - tax
If the returning GP is taking on an employed role then they will go on a payroll and will receive a monthly pay slip showing the tax deducted. This would not by itself trigger the need to complete a tax return as tax will be dealt with via the PAYE system.
For those who are currently submitting tax returns (ie to declare rental income) then notifying HMRC of the new source of self-employment is not necessary. The figures will be reported in the self-employment pages when the return is submitted.
For returning GP locums who are not currently preparing tax returns, but have done in the past, re-registering should be simple as they can use their existing Unique Tax Reference Number and submit form CWF1 online in order to trigger the need to prepare a tax return again.
The tax due on profits made in the tax year to 5 April 2021 will be payable on 31 January 2022. In order to save sufficient money aside to cover this liability many will be taxed in the 40 per cent tax band and those below State Pension age would also be liable to pay National Insurance at up to 9 per cent and so keeping aside half of profits (earnings minus expenses) should see enough being saved.
For more advice for your GP Practice amidst the coronavirus crisis, please contact James Gransby.