Global sum increase is a ‘step in the right direction’, say medical accountants
February 21, 2019
AISMA Chairman Bob Senior and board member Andrew Pow give their response to Pulse following the 92p increase in the global sum. ‘Although 92p does not sound like a big deal, the increase should be seen in the context of the changes to indemnity and the addition of the £1.76 per patient for joining a network.’ Click here to read the article in full.
AISMA responds to GP contract agreement for 2019/20
January 31, 2019
Commenting on the GP contract agreement for 2019/20, Andrew Pow, board member of the Association of Independent Specialist Medical Accountants, said:
‘There is much to be welcomed in the new contract with almost £1bn extra in core funding for practices in England across five years. There are, however, some issues that we are viewing more cautiously, notably the new state-backed indemnity scheme.
‘The indemnity scheme will be funded by a one-off permanent deduction from the global sum and will cover all GPs and staff, including locum doctors. Since locums will no longer need to pay for their own indemnity cover they have been asked to consider their rates. If locum rates do not reflect the new indemnity arrangement GP partners will be pick up the cost twice; once through the reduction in the global sum and again through the locum fee. AISMA raised this during discussions with NHS England and the BMA. Urgent guidance is required on setting responsible locum fees.
‘Also needed will be guidance on the legal and pension structures of Primary Care Networks so that it is clear where responsibility for contracting and employment rests.’
Andrew Pow is available for further comments on 07957 585808
NHS pension scheme consultation: AISMA response
January 28, 2019
Members of AISMA have a deep knowledge of the NHS Pension scheme, specifically relating to the taxation of pension savings. AISMA’s view is that the proposed changes to scheme regulations 2019 as outlined in the consultation document are likely to result in more members of the pension scheme ceasing contributions which could cause the scheme to have further funding issues and a knock-on effect to how the Government affords the obligations payable to existing members in retirement. The reasons for this are complex and highlighted in the Association’s response.
Click here to read the full response.
Death announced of John Dean, former AISMA chair
January 25, 2019
Members of the Association of Independent Specialist Medical Accountants are sad to hear of the death of John Dean, one of the Association’s founder members. A well-known writer and lecturer, Mr Dean was the author of one of the first books to be written about the financial management of GP practices.
Seeing the need for a network of specialist medical accountants to help GPs and other doctors to manage their finances, he was a driving force in the forming of the Association and became its first Chairman in 1995.
The AISMA Executive Board would like to offer their sympathies, on behalf of all AISMA members, to Mr Dean’s family and friends.
AISMA reaction to Hancock GP tax discussions with Treasury
January 11, 2019
Proposed increase in NHS pension scheme contribution rate for employers
December 19, 2018
Responding to the proposed increase in the NHS pension contribution rate for employers, announced yesterday by the Department of Health and Social Care, Andrew Pow, representing the Association of Independent Specialist Medical Accountants, said: “The current rate for employer contributions is 14.38%. An increase to 20.6% will represent an additional £4,665 for GP partners with pensionable earnings of £75,000, £6,220 for those earning £100,000 and an additional £7,775 for GPs with pensionable earnings of £125,000, as well as increased costs in employing staff. This will have a severe impact on practice finances unless additional funding is available. To make it even worse, individual higher earning GPs in the 2015 pension scheme could also see an increase in their annual allowance tax charge.”
A consultation was announced on18 December 2018, and can be seen on the at: www.gov.uk/dhsc(under ‘our consultations’). It will run until Monday 28 January.
Further reporting by GPonline.com and Pulsetoday.co.uk
How to fund payouts to retiring GPs
December 11, 2018
In this issue of Practice Management magazine AISMA accountant Luke Bennett sets out how to manage the funding due to a GP partner coming up for retirement. He starts by writing that the most useful advice to give practice managers who are worried about how to fund the money due to a retiring GP is ‘be prepared’. Download the full article
AISMA welcome pension tax charge reprieve following change to scheme pays election rules
October 10, 2018
Following lobbying from the Association of Independent Specialist Medical Accountants (AISMA) and other bodies, changes in the rules around pension annual allowance tax charges will bring welcome relief to doctors in England and Wales facing unprecedented tax bills in January 2019. The changes mean higher earning doctors can elect for the NHS pension scheme to pay over the tax on the full annual allowance charge, instead of having to find significant amounts of cash themselves from their own funds.
For the 2016/17 tax year members of the pension scheme could only ask the scheme to pay the tax on the excess over the standard annual allowance of £40,000. However, some higher earning doctors have their annual allowance tapered down to £10,000 which meant their tax bills were significantly higher than in previous years (see example).
The Department of Health and Social Care has now instructed that for 2017/18 the NHS pension scheme should pay over all the tax on the excess over the tapered allowance. The Scottish pension scheme has already adopted this rule change.
AISMA representative David Walker, a tax adviser at accountancy firm MHA Moore & Smalley, said: “The change in the rules will alleviate the immediate cashflow worries of doctors facing many thousands of pounds in extra tax charges.” Mr Walker went on to explain: “Doctors who elect for the scheme to pay the tax should understand that there will be a larger reduction in final benefits paid by the pension scheme. This will need to be factored into any decision the doctor makes about whether to elect for the whole amount of tax to be paid by the scheme.”
“Advice should be sought from a suitably qualified financial adviser who has specialist knowledge of the NHS pension scheme.”
In 2016/17 a doctor with pension benefit growth of £60,000 and a fully tapered allowance of £10,000 (and no unused allowances available from earlier years) could ask the pension scheme to pay the tax on the £20,000 above the standard £40,000. However, he or she would have to pay the tax through their self-assessment on the balance of £30,000 above their tapered allowance of £10,000. For a 45% tax payer, this amounted to a further £13,500 in their January 2018 payment, plus payments on account for the following year.
In 2017/18 a doctor in the same situation can now ask the scheme to pay the tax on the whole excess of £50,000.
AISMA response to Welsh pay award
September 25, 2018
Commenting on the Welsh government’s announcement that GPs in Wales will receive a 4% pay rise, backdated to 1 April this year, Jim Duggan, AISMA board member said:
“For too long now Welsh practices have struggled due to a lower level of funding compared to their counterparts in England and indeed Scotland. It is refreshing to see the DDRB recognise this and take steps to alleviate the financial pressures hard working practices have faced. There is still room for improvement and I look forward to seeing further increases in the funding for Welsh practices to help secure their future viability.”
Practice Management: Practical advice on motor expenses
September 20, 2018
In the September issue of Practice Management magazine, AISMA member Rebecca Gascoyne-Richards offers a round-up of tax relief on mileage and car expenses. Download the full article