Freeing up practices to support COVID vaccination
January 8, 2021
Welcoming the letter from NHSE/I on 7 January 2021, setting out plans to free up general practice to support COVID vaccination, Andrew Pow, AISMA Board member said:
“In November we wrote to the British Medical Association to explain the financial impact of COVID-19 on general practice. Highlighting the concerns AISMA members had about practices finances during the current difficult year, the letter called for pragmatic solutions through income guarantees and cost reimbursements.
“The measures NHSE/I have put in place for the remainder of the 2020/21 financial year answer many of the concerns we raised in our letter and we are pleased that steps are to be taken immediately to reprioritise work in general practice. The additional funding for PCNs is particularly welcome, given the essential role they are playing in managing the COVID vaccination programme.
“AISMA will monitor the situation for GP practices over the coming months and will continue to brief the BMA and NHSE/I on financial issues as they arise.”
Follow this link to download the NHSE/I letter
AISMA and ICAEW publish new tax guidance for PCNs
December 14, 2020
The Association of Independent Specialist Medical Accountants (AISMA) and the healthcare group of the Institute of Chartered Accountants of England and Wales have together issued guidance for primary care networks (PCNs) and their member practices on the tax treatment of PCN income and expenditure.
PCNs are recommended to meet tax requirements by drawing up financial statements that provide a summary of transactions across the network for the relevant accounting period. The financial statements will enable member practices to reflect their share of PCN transactions correctly into their own practice accounts so that they can meet the requirements of tax legislation for the completion of partnership tax returns. The deadline for submitting tax returns for 2019/20 is 31 January 2021.
Deborah Wood, AISMA chairman, said: “This joint guidance has been issued to resolve conflicting views on how to account for PCN surpluses. Many practices are not seeing this income as part of their contract, despite it being commissioned as a Direct Enhanced Service. This means there is potential for practices to under declare their income tax for 2019-20.”
HMRC states that income is earned when services are performed and that the timing of issuing bills, invoicing, or receiving payments does not determine when income should be recognised.
For example, if income is received under the terms of the 2019/20 PCN Directed Enhanced Service, which has no requirement for practices or PCNs to do anything beyond 31 March 2020 to ensure that the core £1.50 per patient income is earned, then that income must be recognised in the year to 31 March 2020, even if it has not been spent on any specific activities at that time. The surplus falls into profit and becomes available working capital to be spent at some future date or to be distributed to the PCN members.
Financial reporting rules specifically prohibit provisions being made for future expenses and losses in the financial statements when no obligation exists at the balance sheet date.
Ms Wood added that this will be a recurring issue in 2020/21 as some PCNs struggle to use their network core payments for the year because of the continuing drain on practice resources as a result of the pandemic.
Follow this link to download the guidance document
Response to 2019/20 Pensions Annual Allowance Charge Compensation Policy
December 11, 2020
Commenting on the publication yesterday by NHS England and NHS Improvement of the 2019/20 Pensions Annual Allowance Charge Compensation Policy, Andrew Pow, board director of the Association of Independent Specialist Medical Accountants, said:
“The publication of the rules by which NHSE&I will compensate clinicians for annual allowance charges are welcomed. However, GPs will have issues with meeting the strict 31 July 2021 deadline for submitting a Scheme Pays Election because of the lengthy process involved in PCSE processing the 2019/20 pension forms and for the Pensions Agency to calculate the pensions growth.
“GPs will therefore need to submit estimated elections, or at the very least a protective nominal election by 31 July 2021 if they think they are at risk of having an annual allowance charge in 2019/20.
“GPs will then have to apply using a separate compensation policy application form via PCSE. The methodology of this has not yet been agreed with PCSE so GPs at the moment cannot make the compensation application.
“A significant number of GPs do not have correctly updated pension records. Producing accurate information will be at the heart of making this policy work and there is an urgent need for PCSE to correct the large number of out-of-date records.
“The policy is based on a very complicated system with many possibilities for things to go wrong. It’s essential for GPs to keep hold of the records and confirmation letters that they receive right up until retirement.”
Practice Index: 24-hour retirement for GP partners
August 14, 2020
AISMA response to HM Treasury pension consultation
July 17, 2020
Commenting on yesterday’s announcement by HM Treasury of a consultation to seek views on proposals relating to the 2015 public service pension scheme reforms, Deborah Wood, chairman of the Association of Independent Specialist Medical Accountants (AISMA) said: “This is a positive development for doctors who are members of the 2015 NHS Pension Scheme. It follows a Court of Appeal judgment in December 2018 which ruled that the transitional protection arrangements under the scheme for doctors closer to retirement directly discriminate against some younger pension scheme members.
“The government is seeking views on two proposals outlined in the consultation. For doctors the permutations are numerous, with consequences for revised tax calculations on pension growth. We will be responding to the consultation in due course, once our pension experts have undertaken a thorough analysis of the proposals outlined.”
The consultation closes on 11 October. Documentation can be found here:
AISMA elects new chair
May 18, 2020
Deborah Wood has been elected chairman of the Association of Independent Specialist Medical Accountants (AISMA). She takes over from Bob Senior, who has led the Association since 2010, following his retirement earlier this year.
Ms Wood is a partner at MHA Moore and Smalley, an accountancy firm based in the North West, where she leads the specialist healthcare services department. James Gransby, a partner at the Bromley office of RSM UK Tax and Accounting, becomes AISMA’s vice chairman.
Paying tribute to Mr Senior, Ms Wood, who is a founder member of AISMA, said: “Through his leadership, Bob has been an excellent ambassador for AISMA and leaves the organisation in great shape. As chairman my aim is to continue developing the excellent relationships we have built with the BMA, HMRC, NHS Pensions, NHSE/I, and their respective bodies and representatives in Scotland, Wales and Northern Ireland.
“AISMA, which celebrates its 25th anniversary this year, represents the views of the thousands of GP practices advised by the Association’s network of members, who are all highly knowledgeable specialist accountants with much to contribute to ensure the long-term sustainability of general practice.”
Claiming for additional costs during Covid-19
May 11, 2020
To assist practices in claiming additional costs during the COVID-19 emergency, the BMA, in conjunction with AISMA, has prepared a template reimbursement claim form.
This can be used to claim the costs from Easter weekend, and any other additional costs that might arise which are agreed to be reimbursable.
The form covers both staff and non-staff costs and provides costings based on the national agreed reimbursements for Easter weekend. These are able to be amended if a local arrangement was more favourable.
Follow the link to download the form, which includes guidance for completion.
Pulse: NHS England advises GP practices not to furlough staff
May 4, 2020
An article published on the Pulsetoday.co.uk website reports advice from NHS England that GP practices should not use the government scheme to furlough staff. Deborah Wood, AISMA vice-chairman, talking to Pulse, said: “I am anticipating that NHS England / Improvement will recognise that there is an issue regarding additional costs for cover with regard to self-isolation and shielding, and will deal with this by way of additional reimbursement funding.
“Practices should therefore discuss this with their CCGs, and only consider the furlough scheme for staff who are funded from private income sources that have temporarily ceased.”
Follow the link to read the article in full.
AISMA responds to 2020 Budget announcement
March 11, 2020
Responding to the 2020 Budget presented by the Chancellor of the Exchequer today, Andrew Pow, executive board member of the Association of Independent Specialist Medical Accountants (AISMA) and partner, Mazars UK, said: “We welcome the news that the annual allowance threshold for the NHS Pension Scheme will be increased by £90,000 for the 2020/21 tax year. This means that any doctors earning up to £200,000 will now get the full annual allowance of £40,000.
“While this will not remove higher earners with growth above £40,000 from having a tax charge, it will mean most doctors will not have their annual allowance tapered down. It will be important that NHS pension records are kept up to date so that higher earning doctors can assess their tax position.
“The Chancellor also announced that entrepreneurs’ relief on business capital gains will be reduced to £1 million from £10 million. This keeps the allowance in place for most GPs selling shares in their premises.
“The earlier announcement today of a reduction in interest rates by 0.5% will benefit doctors who have variable rate loans on their surgery borrowing.”
Updated GP contract – AISMA verdict: PCNs win but core contract loses out
February 7, 2020
Response to update to the GP contract agreement 2020/21 – 2023/24
Published by the BMA on 6 February 2020
Speaking on behalf of the Association of Independent Specialist Medical Accountants, Andrew Pow, partner at Mazars UK, said: “It is positive that NHS England has responded to the concerns raised around PCNs, particularly the removal of the requirement for practices to fund 30% of the cost of new roles and the assurances given around the risk of future employment liability. It is encouraging that PCNs can now actively chose to engage with community partners to employ staff on their behalf.
“There is now a clear active agenda to encourage resources to flow into primary care, although concerns remain around the availability of staff to take up new roles, particularly in areas that have struggled to recruit.”
Mr Pow continued: “It is encouraging to see financial support for new doctors taking up partnerships, although the new contract does not address the current retention issue. From April 2020 seniority income will cease and it is disappointing that there is no replacement of incentives for partners to remain as partners. Many partners will question the Locum Support Scheme as they already feel the balance in favour of being a locum over a partner is too strong.”
According to Mr Pow, the digital-first service initiative is positive, with many areas now adopting these services to improve patient access. “It is not entirely clear what funding will attach to this, but if it is funded in a similar way to PCN staff then it should be helpful”, he said.
While there is good news around premises investment, Mr Pow said issues remain about premises costs in leased premises which remain unresolved.
Mr Pow warned that, against a backdrop of constructive initiatives and support, there is very little additional funding going into the core GMS/PMS contracts, which will be expected to pick up the costs involved with improved employment provisions for staff. “Many practices are now beginning to feel the impact of the increases in the minimum wage flowing through all staff levels”, he said. “A rise in the global sum to £93.46 – an increase of £3.58 on the face of it – looks positive. However, practices will have lost all MPIG and seniority funding from April 2020 and have staff pay increases and new employment conditions to absorb. In many cases this may deliver a profit reduction year-on-year.”