Back in Spring 2017, sickness payments and requirements were amended. Although the amendments were made, the entire process remains a complex situation for GP practices. In this post we will be looking closer at sickness leave for private GPs, and find out what can be claimed to make more sense of some common misconceptions.
In a long story short, if either a GP partner or employed/salaried GP happens to be off sick for a period longer than a fortnight, the practice itself can start claiming reimbursement of the financial implications to cover those missed GP sessions from the third week of sickness.
These reimbursements can be claimed where the cover is provided by a locum, a salaried GP on a fixed term contract, or a GP already working in the practice, who is not currently working full time (e.g. employed/salaried or a partner).
If you’re not sure whether your practice is eligible to make this claim, “full-time” is known as nine sessions of clinical work per working week and a “working week” is defined as a working day being during the period of 8am – 6:30pm, on any weekday, except Good Friday, Christmas Day or bank holidays.
There is a qualifying period of two weeks where you will receive no reimbursements of financial loss from sickness leave. However, after two weeks, if your claim is correct, reimbursements will begin, with the maximum amount payable is £1,751.52 per week up to 28 weeks. After a 28 week period, the maximum amount payable is £875.76 per week up to 54 weeks.
It is important to understand that sickness leave payments will not be made on a pro-rata basis, having regard to the absent performer’s working pattern, and will be the lower of actual invoiced costs or maximum amount.
As an example of what you can expect from these reimbursement, if a practice contracts a locum to provide sickness cover and they charge £1,500 per week, then this is classed as the lower amount and it is this amount that will be reimbursed to your practice. Alternatively, if a locum charges £2,000 a week, the lower figure will result in a reimbursement of £1,751.52.
Although this is an extremely helpful scheme, it is not uncommon for GP partners or employed/salaried GPs to take one for the team, by increasing the number of sessions they work in order to provide sufficient cover upon the sickness leave. A very common misconception is that practices think that they can’t claim on these increased sessions in house, when in actual fact they can!
Practices must have a transparent process in place for calculating the value of rates per session and treading carefully when it comes to that the GP performer providing cover does not exceed the limit at full time for the nine clinical sessions per working week. The maximum of nine clinical sessions per week must include any existing / normal commitments when it comes to covering for another GP.
Retaining evidence of sessions worked for GP partners or employed/salaried GPs is good practice too and will make things much easier, is goes for the locum GPs too, as the commissioner may ask for evidence on how the sessional rates were calculated for your practice.
It is worth noting that there are also flexible arrangements for GP performers returning to work on phased returns. This applies if the Fit Note is continuing to declare sickness absence for the period, subject to and excluding any agreed working arrangements. An example of this could be, if a GP is advised that they may be fit to work 2 days out of 5 for two weeks – then the other three days in those weeks for the period remain as sickness absence.
Payment are in respect of necessary cover for this sickness absence under a Fit Note advising phased return or adjustment of hours may be mandatory or discretionary, subject to the requirements of the SFE being met.
Conclusively, although there is an element of complexity to the process, the new sickness leave reimbursement scheme has hugely benefited practices that have been struggling with sickness leave, and as a result provided some much needed support during difficult times.
Hands up if you still haven’t filled out and sent off your tax return!
With only just over a month to go until the deadline on the 31st January 2020, if you haven’t submitted your tax details for this year yet, you are not alone. Around an estimated 700,000 of us will be leaving the much hated chore until the very last day, usually due to inadequate skills and confidence to fill it in without the stress of worrying about if it is correct or not.
At Accounts Unlocked For Doctors, we consider ourselves experts on the tax return front, and we have some top tips for all of you that are struggling to fill out your tax return or make sense of it.
If you’ve left it last minute, the only way is online. Creating an online account is actually a very useful and efficient tool to have. You can complete your entire tax return there, stay up to date with its progress, and you will see how much you owe, as well as the ability to make payments or set up a payment plan for your tax arrears.
You must set up this account at least 14 days before the deadline if you don’t already have a self assessment account, as you will need an activation code sent in the post that can take up to 10 days to arrive.
GET YOUR PAPERWORK TOGETHER
Before you even attempt filling in your tax return, it is important to make sure you have all the relevant paperwork to actually get it done successfully. We suggest organising your paperwork efficiently throughout the year to ensure you don’t spend the entirety of January searching for loose paperwork that could be anywhere.
Paperwork can include receipts, proof of bills, P60, P45, P9D and bank statements to name a few.
AVOID CALLING HMRC
The very last resort you should be going to is calling HMRC. If you want to maintain your sanity and not lose hours of your life in their never ending telephone queues, find another way to get the information you need. The HMRC website is FULL to the brim with useful information and video guides to filling in your tax return that won’t have you waiting for 3 hours to get one answer.
LEARN FROM MISTAKES OF THE PAST
If you have spent hours trying to gather paperwork and find information that you forgot you needed, it’s understandable when it is your first tax return, but if this is your third or fourth time, you really need to learn from your mistakes.
Creating a spreadsheet with your income and expenses is a great place to start when it comes to organising your tax return. Opening a separate account to pay in your taxes that you will pay a portion of your earnings into every month is another important element of organisation, and will stop you from being hit with a huge unexpected bill in January.
HIRE AN ACCOUNTANT
The most stress free way to submit your tax return is to use an accountant and have them do it for you. Accountants are experienced in dealing with tax returns and helping with all the issues and paperwork so that you don’t have to.
Accountant fees usually range from £200 to £400 + VAT however they usually make savings to your final tax bill that will go some way towards paying off their fee.
The pension crisis in the healthcare sector continues to rattle on as the government have made promises of compensation, but doctors are not very trusting of these promises – and with good reason.
The government has become so untrustworthy in the eyes of healthcare professionals, that the UK’s main doctor’s union is seeking a legal guarantee from the National Health Service that will essentially cover pension tax bills, as professionals on the front line of the healthcare services are sceptical about the government’s plan to try to convince doctors, nurses and surgeons to work extra shifts to prevent a winter healthcare crisis.
Last week, NHS England offered to cover pension tax charges, in a bid to get more healthcare professionals back into work to cover shifts and take the mounting pressure off the NHS during winter months. Concerns over six figure tax penalties on pensions have forced doctors and surgeons to reduce hours to protect their earnings, and it couldn’t come at a worse time for an understaffed and underfunded NHS.
The growing concerns regarding the pension tax has presented a huge knock to the NHS, with tens of thousands of healthcare professionals halving their hours. Most doctors are turning down extra shifts that are needed to be covered out of fear that they will overstep the annual retirement savings limit.
The NHS and government had hoped that an intervention in time for the winter demand in healthcare that has already seen emergency care targets missed, including cancer treatment and critical surgery. There are around 4 million people in the UK waiting for routine surgeries.
The British Medical Association have warned that it’s members were very worried about signing up to the plan, and wanted some advanced reassurance that they will be protected from huge amounts of earnings being taxed.
The BMA told the Financial Times;
“The proposed arrangements are extremely complicated with payments potentially being made by employers decades in advance,” said Vishal Sharma, chair of the BMA pensions committee.
“The BMA is seeking assurances that these payments will be guaranteed even if a doctor’s current employer or even NHS England were to not exist in their current form at such a time.”
In a bid to protect their earnings, healthcare professionals including surgeons and general practitioners are cutting their hours due to the pension crisis that has taken over the healthcare sector the last few months.
It is thought that more than two thirds of surgeons have cut down their hours due to a combination of tax and pension rules that have seen professionals worse off, financially, when they work harder.
The readjusted rules means that healthcare professionals could see up to 90 percent of their earnings taxed when they earn over £110,000, and this includes their pension contributions too.
The rulings have led to a number of surgeons and doctors cutting their hours down substantially, with further threats of going part time continuing to loom over surgeries and hospitals during the busiest time of year for healthcare professionals. A poll of almost 2,000 doctors reveals that 69 per cent of surgeons have cut down the amount of time they are spending working in the NHS as a direct result of rules with their pensions.
Boris Johnson has promised to fix the problems, however since those were made, a General Election has been announced for the 12th December. The current Prime Minister pledged that he would work with the treasury to ensure positive improvements would be made by the next tax year in April 2020, again it is unforeseen that this will stand.
Patient wait lists have risen from 4 months to 10 months almost overnight and with the unsteady future regarding the current government promises, we don’t see this issue being resolved any time soon. The government want to offer a consultation into the situation, but with the winter months drawing in and patient care needs increasing, this is something that needs immediate attention, with a turn around of immediate effect.
Doctor’s annual allowance has been the talk of the healthcare industry for some time now, as aggravation about pensions continues to boil over. Doctor’s are angrily sharing their frustrations on how they believe that they are being unfairly treated and negatively impacted by the strict structure being put onto the NHS pension scheme.
To add to the irritation felt by numerous members of the medical industry, the BMA (British Medical Association) is now calling for the government to reform both annual allowances and tapered allowances for doctors when it comes to the NHS pension scheme.
So, what is the annual allowance for Doctors?
The annual allowance was introduced in 2006, and originally set up with the intentions of limiting the amount of money that could be saved each year into a pension each year, before a tax charge is applied.
The annual allowance was originally set at a healthy £215,000 but has since drastically dropped through revision, to just £40,000. Each revision has put the risk of running over the annual allowance at an all time high for doctors, which has intensified since the introduction of the tapered allowance too.
How does tapered allowance affect doctors?
In 2016, the government introduced tapered annual allowance, to further the restrictions on the amount of pension tax relief available to those on already high earnings and target those with already high pension savings.
The scheme has consequentially caused more trouble than it is worth, as many doctors saw huge tax bills, that has resulted in them removing themselves from the NHS pension scheme.
Any breach in annual allowance is tax charged at the individuals’ highest tax rate. This will be either 40 per cent or 45 per cent.
A large amount of doctors are now refusing to take on additional work as a way of keeping income down which will therefore help them to avoid tax charges where their pensions are concerned.
Although a surge of doctors are removing themselves from the NHS pension scheme, the benefits of the scheme could outweigh the negative impacts when it comes to annual allowances.
Every single doctor’s circumstances are different, so it’s important to make sure you keep your clients best individual interests at heart of what you do and keep yourself up to date on the ever changing schemes.
The FT adviser has suggested a great way for doctors to get on top of what they’re earning and how they could be affected by advising;
“A practical step that doctors can take is to work out their threshold income by adding together their gross income from all sources and deducting their pension contributions to establish if they exceed the £110,000 limit.”
When it comes to picking an accountant you may find yourself getting a bit overwhelmed by the amount of accountancy companies offering you a huge range of services. However, it’s important to not be blind sighted by huge discounts and special offers that can disguise a lack of crucial experience and skill that you should be looking for in a good accountant.
We are sharing the five things you should expect from your accountant…
Know Your Business/Industry
Your accountant should have a sound grasp of your business and the industry your business is in. You should expect your accountant to research and take the time to understand and value the businesses needs and goals. Your accountant should know what you do, and what key members of your team bring to the business too.
Improvement In Your Cash Flow
Cash flow is an extremely important element to the good functioning of a business, and something you should expect your accountant to improve. Your accountant should be continuously advising you on ways to improve your cash flow and supporting that as a priority in their role.
Prevent Any Unexpected Bills
An important element to an accountants role, is to prevent any unexpected bills, and failing to do so is really a rookie error. An accountant should be clear and concise with any expenditures to the business. They should always provide you with estimated costs and prepare you for outgoings.
Be GDPR Compliant
GDPR has been one of the biggest changes to business in over a decade, and making sure you are GDPR complaint can be the difference between a business thriving and a business being shut down. The sensitivity of the data you will share with your accountant about you and your business should be enough to prioritise finding an accountant who has their own GDPR regulations, as well as following your businesses.
Get Your Tax Correct
A no brainer for an accountant right?! But essentially, this is the most important job you require from your accountant and getting it wrong can cause a lot of problems for you and your business.
You may not have sound knowledge and the experience to manage your financial obligations whilst running your business, so it’s important to employ somebody who does – an accountant. A great accountant will have your tax return filed for the year, and proactively working on your next one.
HMRC has made the decision to delay MTD (Making Tax Digital) for both business and individuals for the foreseeable future beyond 2021.
Although VAT has already gone digital recently and will continue to remain digital, issues surrounding Brexit has pushed HMRC into the decision to postpone the MTD scheme for at least two years.
MTD was supposed to be rolled out completely across the UK in 2020, however with the unfortunate circumstances of how Brexit has been handled, the government feel that it would be best to place a wider extension on the digital roll out, whilst terms are still being negotiated.
In the Spring Statement the chancellor said:
“The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.”
MTD for income & corporation tax was scheduled to come into effect from 2020, but as the UK prepares itself for Brexit, HMRC has redirected its focus on the implications of UK’s exit from the EU.
HMRC has said that its digital delivery team and business analysis team are being redeployed to focus on ensuring that a customs solution will be in place should it be required when the UK leaves the EU.
With the current perplexity surrounding Brexit, HMRC has stressed that ‘this does not indicate any expected outcome but is due to the level of work required to deliver any outcome’.
You will find that most GP practices need not worry about VAT, as almost all of the services a GP practice provides are VAT free. However, not all services that you can offer at your GP practice are exempt from VAT, so it pays to be careful and get a good understanding about what you can and cannot do.
To give you a clear understanding of the difference between an exempt from VAT service and services that incur VAT, we have separated the two…
VAT exempt services
Services are exempt from VAT where those services are principally aimed at the protection, maintenance or restoration of the health of a patient. These are the principal services offered by a GP practice.
Services that include VAT
Some services are not exempt, and are subject to VAT. Those services are where the principal purpose of the service provided, is the provision of information to a third party enabling the party to make a decision.
To give you more clarity on this here are a list of services that will incur VAT responsibility…
- Certificates/reports. A certificate or report may be subject to VAT or exempt. The dividing line is often difficult to pin down.
- Reports enabling claims to compensation, benefits or registration as a blind person are all subject to VAT.
- Dispensing of drugs for dispensing practices.
- Fitness certificates as part of an individual taking up a particular professional or sporting activity.
- Cosmetic services undertaken purely for cosmetic reasons.
- A forensic statement or report.
- DVLA medicals.
- Medico-legal work such as medicals, reports and expert witness testimony for the judicial system.
- Pre-employment medicals.
If your practice will or already does carry out any of these services that incur VAT, it is important to keep track of your earnings through those. The total limitation right now is £82,000 and if you exceed that you will need to set aside an amount of income to be taken as VAT.
If you are not sure if you are exempt from VAT, or you need somebody to take care of your VAT responisibilities, Accounts Unlocked For Doctors are here to help.
We can oversee and calculate what you are predicted to earn over or under the limitations and work with you accordingly to give you peace of mind and unrivalled organisation of your tax and VAT affairs.
At accounts unlocked for doctors we deal with and file a number of tax returns for our medical professional clients, whom value us as a service, taking a weight off of their busy shoulders so that they can concentrate on saving lives and bettering patient health.
There are two types of clients we work with, those who want their tax return filed as soon as they are able to submit it to HMRC in the new tax year, and those who leave it until a few weeks towards the deadline. Although both ways are equal submissions, there are a few benefits to submitting your tax return early.
MORE TIME TO BUDGET
Giving yourself more time to budget and spread those tax payments can be a real life saver for many of us, and can save a lot of stress if you have an unexpected amount to pay. The sooner you submit, the longer you will have to pay your tax bill and will relieve any anxieties or stress you may be having about the affordability of your tax bill.
YOU CAN USE YOUR TAX CODE
Another benefit of submitting your tax return early is that if you owe less than £3,000 in tax, you have the opportunity to have your tax liability collected through your tax code.
This would be a great option for employees, as they can have their taxes collected from their wages without having to worry about saving up the right amount over time.
FASTER TAX REFUNDS
Why wait for your tax rebates? Submitting your tax return early will accelerate the turnaround in when you will receive what you are rightfully owed. This means the money can be back with you, sat in your bank account generating interest or you could treat yourself to a holiday if you have accumulated a higher refund.
NOT MISSING THE DEADLINE
It’s so easy for busy people to put off their background admin like tax returns and almost forget about it day to day. That is why 10% of tax returns are filed late.
If you file late for your tax return you will get an automatic £100 fine to start off. If your tax return then becomes more than 3 months late, you will be charged a daily fee of £10 up to £900. After 6 months you will be fined a further £300 or 5% of your tax due, as well as an extra 5% if your tax return is 12 months late.
It really isn’t worth losing money or sleep over, and getting your tax return in early will allow you to be free of any worry or regret that you didn’t submit sooner. If you are the forgetful type a team of experts like us are your best bet for keeping your tax return on track.
Accounts Unlocked For Doctors are available to assist you with your tax return at anytime in the financial year and we work hard to give you the very best outcome. Whether you file early or leave it until last minute, Accounts Unlocked For Doctors is here to help.