The recent changes to the NHS Contract requires GPs to declare their earnings for 2021/22 if their income is in excess of £156,000. The declaration must be completed by 30 April 2023.
The guidance that has been issued by NHS England is flawed in our opinion. This opinion is shared by the BMA who used our examples to demonstrate the key flaws in their publications on this matter. The flaws can be summarised as follows:
- The definition of earnings is based on pensionable earnings. This includes the surplus of notional rent over interest payments but makes no adjustment for the capital repayments made by the GP. This discriminates against those GPs who own their own surgery.
- Pensionable income is based on taxable income, so a GP who purchases an electric car will have less declarable earnings than a GP who does not own an electric car. This demonstrates the arbitrary nature of the current definition of earnings.
- A GP who is a member of an unincorporated PCN will have different declarable earnings to a GP with identical practice earnings who is a member of an incorporated PCN. This is because the surplus in an unincorporated PCN has to be declared by the GP even if the PCN retain the surplus. In the incorporated PCN the surplus does not need to be declared by the GP unless the PCN makes payments to the practice. This discriminates between those GPs who practices are members of unincorporated PCNs instead of incorporated PCNs.
- The definition of earnings takes no account of the amount of time that the GP has worked. Where a GP has had to work additional sessions or weekends as a consequence of an inability to recruit clinical or management assistance, the threshold to declare remains the same and not uprated. The result of this is the information declared is not in context and is meaningless
We are not advocating that GPs simply fail to declare their earnings which would put them in breach of their contractual terms of service, but we have designed our own alternative calculation of GP earnings which is calculated as follow:
The calculation is based on the GPs share of practice profits and is then adjusted for the following:
- Any surplus of notional rent above loan interest or landlord costs are removed from profits.
- If the GP has earnings from non NHS sources, these are not part of the contractual arrangement with the NHS and are removed from profits.
- If the GP has been managing a list size larger than average, the profits are adjusted to ensure that the earnings are a meaningful comparator to the average declarable earnings.
- Finally, the employers superannuation is removed from the remaining profits
We are offering our clients this service – a ‘Ramsay Brown’ calculation of declarable earnings. This calculation may be used to explain your decision with regard to the obligation to declare your earnings. Cost: £100 + vat.