GPs have been under unprecedented pressure in 2020. After being thrust into the front line in the Covid-19 pandemic, they have been working in the most trying circumstances, with uncertain resources and constantly shifting restrictions.
Even in these challenging times, long-term systematic changes to the regulations pertaining to GP finances still rumble on. The challenges faced by GP practices have been compounded by the need to keep up-to-date with changes such as the NHS New to Partnership Payment Scheme the nuanced tax implications of Primary Care Networks, and the Annual Allowance charges on pensions with the resulting relief provided for the 2019/20 tax year by the Scheme Pays process.
In addition to these changes, partners and practice managers have to accept that the pandemic has prompted a significant number of GPs to reassess their working practices. For example, GPs on reduced hours may have increased their workload during 2020 to cope with the combination of increased demand and staff absence due to isolation or illness. This in itself could have implications on the GP’s tax bill and the financial management of the practice.
GPs and practices, therefore, need to scrutinise all Total Rewards Statements with even greater care to ensure that all hours have been accounted for. And they need to be sure that payment for increased hours has not tipped any partners or managers into a higher tax bracket. There is a strong possibility that a number of GPs may be reassessing retirement plans, both in terms of bringing forward or delaying retirement.
On a practical point, if a practice has a number of senior GPs or administrators who could be retiring, it will have to be wary of falling foul of the Final Pay Control regulations. These were introduced to stop a practice awarding a pay rise to an individual just before retirement in order to falsely boost their pension.
A breach in the regulations can result in a hefty fine for the practice. Even if the practice does not intend to break the rules, there are a number of hazards that can trip up the most well-intentioned practice management team. These include issues with part-time workers, pensionable bonuses, and retirement due to ill health. (A more detailed article on Final Pay Control regulations will be coming soon.)
The pandemic has had a profound effect on GP practices, not least on the stability of staffing levels. With many GP practices running with reduced administrative capacity due to funding, social distancing, and illness, it is ironic that this is the time where more strategic planning and financial management is needed.
For help and support for all aspects of financial management for GPs and GP practices, please contact FK Medical at email@example.com.