The topic of annual allowance has always been a complicated one and in light of the healthcare crisis we have recorded a new webinar which explains the changes to the Annual Allowance from 6 April 2020. We also touch upon the announcements made by NHS England and NHS Scotland in 2019/20 together with a recap on the basics of the Annual Allowance and Tapering.
As many of you will know we have spent many years understanding how the growth arises in the NHS Pension Scheme for Annual Allowance and Lifetime Allowance purposes. In a number of cases we have identified incorrect Annual Allowance statements which have then been rectified following our intervention to avoid erroneous tax liabilities that were either too high or not due at all.
If you require any assistance with your Annual Allowance reviews or Scheme Pays Elections then please get in touch.
Primary care networks or PCNs have been with us for a year or so now in England and we are now at the stage where the PCNs will need to produce an account of its finances. Over the last 12 months there has been much talk of how monies will be spent and in some cases the PCNs will have a surplus of funds which needs to be considered as HMRC may treat this as income earned by the practice and expect individual practices to pay tax on this surplus.
The accounting treatment of the PCN monies from an individual practice perspective is therefore important as is the sharing of resources and the clinical director role.
We can help with the preparation of the PCN finances and can discuss the best approach to minimise the tax impact on practices. If you would like to engage us to prepare the finances of the PCN, please get in touch.
Click the webinar above to hear details of the new bounce back loan scheme.
If you need any assistance at all then please do not hesitate to contact any of the partners or associates here at Sandison Easson & Co.
Finally, thank you for listening to our webinar and also the wonderful job you are doing for all of us and our families during this difficult time.
The government announced yesterday a new type of loan that is 100% guaranteed by the state.
The initial details suggest that you can borrow between £2,000 and £50,000 with no fees or interest for the first 12 months with no repayment for the first 12 months and a loan term of up to 6 years.
This new scheme is a follow up to the criticism over the Coronavirus Business Interruption Loan (CBIL) where banks were slow to respond and the take up was low as detailed information was needed based on ‘normal’ lending requirements.
More details of the new loan will be available from Monday 4 May 2020.
Very few details have been released but what we know so far is that to be eligible for this new loan you must be:
1. Based in the UK
2. Have been negatively impacted by the coronavirus
3. Were not in ‘difficulty’ on 31 December 2019
With all that is going on at the moment it can be difficult to keep up with financial updates, of which, at this time of year, there are many. To help we have pulled together the financial changes from the GP Contract for 2020/21 into a single article for you to refer back to. Below we start with the headline announcements and finish with the usual annual changes.
New Partnership Payment
To help with recruitment of partners, from April 2020 first time partners will be offered a guaranteed one-off payment of up to £20,000 per full-time partner and £3,000 of business training allowance to support them as a new partner.
This payment is initially in the form of a loan and only converts to a permanent payment after a fixed period of time as a partner.
From October 2020 contractors and sub-contractors are required to submit self-declarations annually if their NHS superannuable earnings are over £150,000 per annum – starting with 2019/20 in February 2021.
This threshold will rise each year in line with predicted CPI rises giving an expected threshold for 2020/21 of £153K and 2021/22 of £156K
Premises Costs Directions
Commissioners can now award improvement grants funding up to 100% of project value.
Primary Care Networks
Further to the revised network contract DES 2020/21 there has been further updates relating to the COVID-19 pandemic which have resulted in specific changes to the DES
Full details of the changes can be found here
Job Retention Scheme
Following on from the Government public announcement of the grant available for staff that are furloughed more details were published yesterday and can be found by clicking the link below:
Read the latest Job Retention Scheme here
It is designed to support employers whose operations have been severely affected by coronavirus.
The main point is that furloughed staff cannot undertake any work for you. This includes provision of services or generation of income.
If an employee is on reduced hours or reduced pay they will not be eligible for the 80% grant.
The scheme applies to any type of contract including:
- Full time
- Employees on agency contracts
- Employees of flexible or zero-hour contracts
You must write to your employee to explain that they have been furloughed and keep a record of communication.
Any employee hired after 28 February is not eligible.
The grant will be based on actual salary before tax as of 28 February 2020. Fees, commissions and bonuses are not included.
From the partners and staff at Sandison Easson & Co we owe you all a debt of gratitude during this period.
All of us have family and friends that work in various sectors of the NHS and appreciate the task that will lie ahead.
What we can do to help, as we always have, is with your financial affairs. We understand that your normal working day will be altered and as such the partners and associates will be available night or day to deal with any queries you may have.
All of us are in this together.
We will still be attending to deadlines of tax returns and accounts which will be even more important as financial planning will be on your minds and you will want to focus on dealing with patients.
The Revenue will have some flexibility with regards to tax payments. These are explained below.
Coronavirus job retention scheme
Due to the speed at which this scheme has been rolled out, there remains many areas to clarify but at the time of writing we know the following:
- All of our clients are eligible for the scheme where they employ staff through a PAYE scheme.
- Workers are given a special status of being ‘Furloughed’ (see further information below).
- HMRC will reimburse 80% of their wage cost subject to a maximum of £2,500 per month.
- Effective from 1 March 2020 if you have already had to take steps with your employees.
- HMRC are working on their systems to facilitate the above.
We understand that one of the eligibility criteria will be that a PAYE scheme has to be in place for your employee(s). Many clients pay salaries below the level required to maintain a PAYE scheme and at the time of writing we do not believe that anyone in that position will be eligible for the scheme. Additionally, anyone engaging the services of as secretary on a self-employed basis cannot use the scheme but one would expect your secretary payments to be reduced following a reduction in activity.
Where eligible, HMRC will provide funds to support the worker’s wages and prevent the need to make them redundant.
Where a business does not have sufficient work to retain the services of an employee they can designate affected employees as ‘furloughed workers’. They remain an employee and the terms and conditions of their employment are still enforceable.
During the special measures period, the partners and team at Sandison Easson will largely be working from home. We do have certain members of the team in isolation and unable to work which is a dynamic situation and therefore we suggest that any queries that require an urgent response are directed to the partner or associate that is responsible for your affairs. Their contact details are:
Finally, we thank you for everything you are doing for us and our families.
In this months' publication of Independent Practitioner, one of our partners, Ian Tongue, explores some of the more common ways consultants work together.
You can read his article here
One of our partners, Aaron Swinton, has been invited to speak at the next Dinner and Conversation Evening held by DGL Practice Manager.
The event will be at the Swan, Shakespeare's Globe in London on Wednesday 20th June 2018 from 6.30pm onwards.
Aaron will discuss ways to minimise the effect that Tapering of the Annual Allowance has upon Consultants' tax affairs.
If you would like to attend this event then please contact Lisa Goodall on 01625 527 351 or send her an email to firstname.lastname@example.org