UK200healthcare group news

doctors & dentists

issue 2 2013

Internal Locums: sharing profit or self employedincome for GP partners?

This means that any internal locumfees paid to individual partners as selfemployment income will not countas NHS income for superannuationpurposes. Conversely, internallocums taken as a first share ofpartnership profit do qualify to beincluded in the calculation of NHSsuperannuable income.

Therefore those GPs wishing tomaximise their NHS pensionableearnings may want to consider thefeasibility of taking their internal locumfees as a first share of partnership profitso that this income can be includedin the NHS pensionable incomecalculation on the superannuationcertificate. In contrast, those GPs whoare looking to keep a downwardpressure on the level of their super-annuation contributions payablemight want to look at the possibilityof receiving their internal locum

fees as self employment income, which would

mean that their internal locum feesreceived would be automaticallytreated as non qualifying for NHSpension purposes and this wouldreduce their deemed NHS incomesubject to superannuationcontributions.

This can be a complex area, withimportant tax, pension and cashflow implications involved which iswhy it is important to take theappropriate professional advice onthis subject before making any finaldecisions. What is clear, however, isthat the recent sharp increases in GPsuperannuation contribution ratespayable, aligned to HMRC reductionsin the life time pension allowanceand restrictions to pension tax reliefclaimable have really been focusingthe minds of GPs as they attempt tonavigate these financiallychallenging times.

Richard MartinUK200Healthcare Group member

Strictly from an income tax andnational insurance point of view, itought not to matter whether apartner receives their internal locumfees from the practice as either a firstshare of partnership profit or as selfemployment income; they shouldstill be subjected to the sameincome tax and class 4 nationalinsurance charges on the fees.

However, from NHS Pensionperspective, there are importantramifications of whether internallocums are treated as a first share ofpartnership profit or as selfemployment income for the GPinvolved. This is because internallocum fees paid by the practice tothe partners as self employmentincome are deemed to be non NHSqualifying under superannuationguidelines. This is because the NHSrules only allow ‘Form GP Locum’ tobe completed and issued in respectof external (non partner) locums.

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GPs could be required to contributeto the salary of trainees at theirpractice, under new measuresproposed by Health EducationEngland (HEE). GP practices arecurrently reimbursed 100% of thetrainee’s salary by local educationand training boards, and receive a£7,600 trainer’s grant each year.However, an impact assessmentproduced by the Department ofHealth showed that the currentsystem does not take into accountthe benefit that practices gain byhaving a trainee.

The proposed plan would introducea new ‘national tariff’ for postgraduatemedical training programmes andprimary care medical education andtraining by April 2014. Although theexact tariff is yet to be decided,similar plans are set to be rolled out

in secondary care, which couldrequire employers to pay 50% of thetrainees’ basic salary, plus aplacement rate.

A spokeswoman for HEE said thechanges were part of plans toincrease the number of juniordoctors training as GPs. “We arelooking for consistent ways of payingfor the training and education that isrequired for the workforce to deliverhigh quality care,” she said.

The plan has been criticised by theGeneral Practitioners Committee(GPC), which warned that it couldmean the “end of general practicetraining as we know it”. Dr BethMcCarron-Nash, GPC negotiatorand partner with a training practicein Truro, said many practices wouldbe unable to afford to provide

training if the tariff was introduced. Dr Krishna Kasaraneni, chair of theGPC trainees subcommittee, said: “Iworry that this fundamentally changesthe relationship between a trainer andthe trainee. If that’s changed toaccommodate a complex calculationof service versus training then it willsignificantly compromise the quality oftraining we receive.”

Formal discussions about the detailsof the tariff are expected to takeplace in autumn 2013. See more at:More at: http://snipurl.com/27qiq9h

GP practices to pay for trainees?

Selling a dental practice in Englandthat holds an NHS General DentalServices (GDS) contract has becomemore protracted following changesto NHS England policy on variationof dental care contracts. However,changes to the Care QualityCommission (CQC) registrationprocess mean it is now simpler forpartners to enter or leave aregistered partnership.

The sale of a dental practice that holdsa GDS contract typically involves theseller and buyer entering into a short-term partnership, usually only for 28 days, to allow time for approvalof the variation of the GDS contractand completion of the sale.

Thereafter, the seller resigns as apartner and the GDS contractremains with the incoming partner.

NHS policy published in April 2013means that NHS England will nowonly grant a variation of a GDScontract if the contract holders candemonstrate that they have firstobtained CQC registration for thenew partnership.

Prior to April 2013, there was noneed to register the short-termpartnership with the CQC, and legalexperts have claimed that the newpolicy could lead to delays incompleting dental practice sales.When registering the partnership,

the CQC must also be convinced of the ‘fitness to practise’ not only ofthe partnership as a whole, but ofeach individual partner, and enhancedDisclosure and Barring Service (DBS)checks must be obtained.

Although selling a dental practicemay now take longer, changes tothe way the CQC registers dentalpartnerships mean it is simpler for apartner to enter or leave a CQCregistered partnership. Anypartnerships that registered as aprovider with the CQC prior to 4thFebruary 2013 must re-register ifone or more of their partners’change. However, once they havere-registered, any future changes tothe partnership can be achieved byapplying to change the ‘partnershipcondition’ of their registration,rather than re-registering as a newpartnership.

Read more about the CQC and NHSEngland requirements on varyingpartnerships and contracts at:http://snipurl.com/27qjhhw and:http://snipurl.com/27qjhk1

NHS England policy could delay dentists selling up

GP practices responsible forinforming patients of newdata extraction system

GP practices must find ways toinform patients of a new system,which extracts identifiable data fromtheir records for use by the widerNHS, private firms and researchers,or face prosecution under the DataProtection Act. The recommendationby the EMIS National Users Group(NUG) and the InformationCommissioner’s Office (ICO) followsthe launch of a pilot scheme that willsee the introduction of the new dataextraction system in 82 practices.Suggestions include displayingposters, leaflets and notices onpractice websites, and ensuring staffinform patients directly about thesystem, as well as their right to optout. However, GP leaders haveargued that sole responsibilityshould not be placed on practicesand that a national awareness

campaign is needed to spread themessage to patients. http://snipurl.com/27qiuik

Contractual changes couldsupport survival of small GPpractices

Small GP practices in England couldbenefit from contractual changesfollowing the controversialwithdrawal of Minimum PracticeIncome Guarantee (MPIG) payments.However, changes are subject tonegotiations with the NHS and theGeneral Practitioners Committee(GPC), which will consider variouscontractual arrangements in order tosustain the viability of very smallpractices that rely on MPIG payments.Nonetheless, the suggestion ofgranting rural practices in England‘specialist centre’ status as a meansof gaining additional funding has sofar been rejected. http://snipurl.com/27qiu1y

doctors in brief...

dentists in brief...The number of dental claimsjumps during 2012

There was a 32% increase in thenumber of legal claims made againstdentists and a rise of more than 12%in dental advisory cases during 2012,according to research by the DentalDefence Union (DDU). The MedicalDefence Union (MDU) attributes theclimb in advisory cases to the rise incomplaints, which has also led to anincrease in staff employed across theMDU advisory, legal and claimsdepartments. However, legal changesin April 2013, which resulted inlawyers receiving reduced fees forclaimant cases, is expected to reducethe number of future cases. RupertHoppenbrouwers of the DDU said:“There is no evidence that clinicalstandards are slipping. But we live in a

consumer society which demands highlevels of customer service andaccountability when things go wrong.”http://snipurl.com/27qiund

Landmark legal casethreatens illegal teethwhitening industry

Spas and beauty salons carrying outteeth whitening could face heavyfines and prosecution, under apackage of measures drawn up byThe British Dental Bleaching Society.The measures follow a ruling thatestablished bleaching as aprofessional dental procedure andthat the public should be protectedfrom unqualified practitioners. Themeasures include allowing dentiststo report cases of tooth damage tothe General Dental Council (GDC)

and urging local authority tradingstandards officers to take actionagainst those using illegal materialsor solution strengths. They alsoinclude encouraging the GDC towrite warning letters to firmscarrying out illegal bleaching. http://snipurl.com/27qiuru

Doctors suffer continuedrise in patient complaints

The number of legal cases againstdoctors increased by 15% during2012, according to research by theMedical Defence Union (MDU). Thefindings form part of a continuingupward trend, with a rise incomplaints of 17% during 2011. The MDU identified both a thrivingcomplaints culture and greaterexpectations among patients as keycontributors. However, anotherinfluencing factor included a rush incases being processed before April2013, when legal changes meantthe amount lawyers were able tocharge for medical negligenceclaims was reduced. Encouragingly,more than 70% of claims during2012 were successfully resolvedwithout the need for a financialsettlement with the claimant. http://snipurl.com/27qiueg

average NHS dental practice incomes fallingThe average income of dentalpractices is falling and theproportion of income that is spenton overheads is increasing, accordingto figures in a report by the Healthand Social Care Information Centre(HSCIC) in partnership with theDental Working Group.

The ‘Dental Earnings and Expenses:England and Wales 2011/12’ reportprovides a detailed study of theearnings and expenses of full andpart-time self-employed primary caredentists who carry out NHS work. The report revealed that the averagetaxable income for primary caredentists delivering NHS care fell by

almost 5% to £74,400 in 2011/12from £77,900 in 2010/11.

Regionally, self-employed dentists inEngland earned a higher taxableincome (£74,600) than those inWales (£70,100).

The amount spent on generalexpenses and overheads such aspremises, equipment, staff andregulatory compliance, fell slightly inreal terms over this period. However,the proportion of annual turnoverthat was spent on overheads andexpenses rose to 68.5% from 67.8%.

Dr John Milne, Chair of the BDA’sGeneral Dental Practice Committee,said the figures were evidence thatdental practices are currently facingserious financial difficulties. He saidthe BDA had repeatedly called on

the Government to properly supportNHS dentistry.

Dr Milne added: “This is the fourthyear in a row that we have seenincomes reduced and it becomingincreasingly untenable for practices tocope. I urge the health departments tolook very seriously at these figures andact to protect practice viability and theprovision of high quality care topatients that the erosion of funding weare seeing is jeopardising.”

In October 2013, the HSCIC and theDental Working Group will publish aseparate report covering dentalpractices in Scotland and NorthernIreland.

Read more at:http://snipurl.com/27qitl8

An NHS GP contract that encouragespractices to come together and take responsibility for communityhealth and social care has beenrecommended by two think tanks;Nuffield Health and the King’s Fund.The recommendation, which hasbeen made in a recent report that isnow being considered by the NHS,also suggests that pharmacists andsocial workers are allowed access topatient records, in order to increaseintegration between social,healthcare and pharmacy services.

The contract, which would be analternative to the General MedicalServices (GMS) contract, wasproposed alongside a new nationalframework for general practice. Theauthors of ‘Securing the Future ofGeneral Practice: New Models ofPrimary Care’ call upon NHSEngland to work with clinicalcommissioning groups (CCGs), GPsand professional bodies in order tocreate a national framework that setsout the ‘outcomes and overall vision’for general practice. However, theyadvise against such a framework

think tanks propose enlarging theresponsibility of NHS GP contacts

specifying how the vision andoutcomes should be achieved,stating that this should be done atlocal level, with extensive patientand public engagement.

On a practical note, the authorsadmit that new funding optionswould be needed before GPs couldtake on a wider range of servicesand suggest that a fund for GPs whoare spending time away frompatients to plan care is set up.Commenting on the proposals, DrRichard Vautrey, Deputy Chair of theGeneral Practitioners Committee(GPC), said the workload ofindividual practices prevented themfrom having the time or space toengage in “sector wide agendas”,and suggested that the focus shouldbe on reducing the pressure so theycould “engage with thinking”. DrVautrey also claimed that newresources are needed to achieve thisand agreed that these should be“shifted” into the community.

For more information, go to:http://snipurl.com/27qivp1

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UK200Healthcare GroupWe are specialist chartered accountants andlawyers providing accounting, legal andadvisory services for clients in the healthcaresector. Our members have a wealth ofknowledge and understanding of the sector,providing expert support and assistance forDentists, Medical Practices and PrimaryCare Trusts. We also provide businesscoaching for Pharmacists, Opticians, CareHomes and Hospitals, Physiotherapists,Chiropodists, Alternative Medicine, LocumConsortia and Consultants as well as dealingwith banks and financial institutions.

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This newsletter has been prepared for general interest andit is important to obtain professional advice on specificissues. We believe the information contained in it to becorrect. While all possible care is taken in the preparation ofthis newsletter, no responsibility for loss occasioned by anyperson acting or refraining from acting as a result of thematerial contained herein can be accepted by theUK200Group, or its member firms or the author.