In this update, Laurence Slavin, discusses the July 2022 Review Body award, and why a 4.5% pay award without extra funding is NOT recommended! Also, Treasury response to request for help with 22/23 Annual Allowance charges, new residence online checker, and more!
My name is Lauren Slavin. I’m a partner at Ramsey Brown LLP Chartered Accountant and this is one of a series of podcasts, broadcast, call them what you like. That we make to keep our clients and other people who are interested in what we have to say up to date with what’s going on in the world of healthcare finance.
So I’m making this broadcast on the 26 July. I always give the date just in case things have changed. And here we go. Let’s see what we’ve got to say about today. So if you’ve been listening to the broadcast that we’ve been making earlier, we’ve been talking about the problem with the annual allowance charge for 2022/23. If you don’t know about it, go and check out the previous broadcast we’ve made. It is a serious, serious problem and most clinicians will have an annual allowance charge, and some potentially a significant annual allowance charge in 2022/23. There are some things you can do. It’s worth having a look at our previous broadcast, might be worth having a look at our pension reports that we’ve been talking about, might be worth having a word with your tax manager. The Association of Independent Specialist Medical Accountants, of whom we used to be members of, have been talking to the treasury about the problem and suggesting that the treasury might want to think about making an exceptional compensation as they did before in 2019/20.
This is the headline that was in GP magazine: “One in Ten GPS Will Quit Unless Pensions Are Tackled”. And below the bottom of this slide is the text of, or an extract of, the response from the treasury to the request from the accountant to fix the problem. And the only bit you need to read is the last line: “The government is not minded to replicate this scheme as a compensation scheme at present.” Of course, the government is actually going through some significant change, so that might be worth revisiting. But have a look at the previous broadcast explaining the problem is a significant problem.
No assets. So this is something that’s been highlighted. HMRC also issued a new significant chapter in their manual on dealing with crypto assets and this was just a report saying that most people don’t really understand how their bitcoins or their crypto assets are taxed.
Generally, if you make a gain with your crypto assets, you will be subject to capital gains tax, unless you are actually dealing in the crypto assets, in which case HMRC might argue that this is a trade and then you’d be subject to income tax on your crypto assets. If you have crypto assets and you are worried about how they might be taxed again, talk to the tax managers at Ramsey Brown and they’ll be able to explain how these things work.
HMRC sometimes have these very useful checkers. So there’s a very useful self-employed checker that you’ve probably come across before. Always good to use if you’re taking on locums, or if you are a locum worried about your tax status, use the self employed checker, print it off, date it, sign it and you’ve got some evidence that at least you consider your status.
They’ve now brought out a checker for your UK residence. Now, I appreciate this isn’t going to affect many of our clients, but it will affect some of our clients. And for those who it will affect, this is actually quite a useful checker to do. So this is the link and if you’re interested, have a go.
So, the main talk today that I wanted to give is really about the latest Doctors’ and Dentist’ Review Body. Their report, some 220+ pages, which I can tell you I’ve read. I’m particularly interested in the Doctors’ and Dentists’ Body. I held a senior position that I’m not allowed to tell you about, but it was in connection with the Doctors’ and Dentists’ Review Body and I know something about how it works… or currently doesn’t work. So, having read the report, I’ve actually highlighted some particular paragraphs that I think are of particular interest. But the Doctors’ and Dentists’ Review Body is an independent body and it takes evidence from the BMA, it takes evidence from the Department of Health, and it then comes up with its own independent conclusions. So what does it have to say?
Well, it’s worth reading these particular paragraphs. So, in terms of affordability, the Department of Health and Social Care, the DHSC, said to the Review Body that the Government had assumed a headline pay award of 2 per cent for NHS staff. Take into account the multi-year deals already in place. So GPS are currently part of this multi-year deal that was set up, I think, back in 2019.
Whether that was such a good idea or not is open to question. Now, what it says here, the Government has said that higher pay rises than what was affordable would lead to a reduced ability to expand clinical capacity and tackle the elective care backlog. It talks about the Scottish Institute and the Scottish Government and the Welsh Government. We will go on to say: “trends in workforce behaviour, including an increase in flexible and less than full-time working, affects workforce capacity across our remit group, even in the absence of increases in the number leaving the NHS. Across the remit group, interest in senior leadership or senior leadership and contractor roles, including leadership positions in hospital and partner GMP status, seems to be waning, alongside a more general shift to less than full time working.”
Now, on a personal point, if you have a health secretary who’s telling you that the partnership model is in terminal decline. I have to say that’s not the view of the current health secretary, from what I understand. But if you have a health secretary who is talking about the end of general practise and GP surgery is being bought up by the state and essentially a salary service, how can you imagine that there will be long term leadership, or interest in long term leadership in general practise? It’s just silly.
So I think this is a real problem. It’s a problem we see on the vocational training courses that we attend. There seems to be a lack of enthusiasm in terms of leadership going forward. Being partners probably needs to change and come from the top.
It says here that many of the issues that I just referred to are not directly sold with higher pay awards. Ever pay does serve as an important signifier of value. Perhaps more importantly, if it is sensed to be deficient, can exacerbate a feeling amongst the medical and dental workforce. They are neglected and undervalued. And it goes on to say in order to address this, the pay award is required that is significantly in excess – 2 per cent proposed by the Department of Health and Social Care.
These recommendations from the Review Body “are made considering the evidence we receive, reflecting the need to recruit, retain and motivate staff, while also considering affordability…” Now, the MYD is the “multi-year deals” that were done. So what they’re saying here is that we note that all three of the multi-year deals were agreed before the scales of increases to inflation became apparent. Therefore it cannot be said that these multi-year deals address those increases to inflation. Our wide recommendations this year do not seek to match inflation, but they have been informed by it to some extent and also by the increases in pay settlements to the wider economy the inflation increases have precipitated. If action is not taken for those under multi-year deals, which is all GPS pretty much, then the relative pay positions of different groups, the overmit will diverge significantly.
We are concerned that doctor dentists under multi-year deals would therefore see their pay falling relative to their peers as a result of having agreed to a multi-year deal. We are therefore extremely concerned that the uplift contained within the multi-year deals are likely not sufficient to address the issues of recruitment, retention and motivation.
We also talk about pensions. “While pensions and pension taxation are outside the formal remit of the Review Body, as a significant component of total reward, any issues with pensions, including pensions taxation, have the potential to significantly impact on recruitment, retention to motivation. We discussed pensions and pension in the report and it features prominently in the evidence provided to us by the parties.”
Interesting that this has been highlighted as a major issue but the treasury, when it’s pointed out to them, have decided that they’re not going to do anything about the particular problems we have in 2022/23.
So then we come to the Review Board is recommendations. Having taken all these things into account, it says, “Therefore, we recommend a 4.5 per cent increase to national salary scales, pay ranges…” blah blah blah. And for all these people and it also says at the bottom here, “These updates should be backdated 1 April as necessary so they’re paid in full for 2022/23.” So this has been highlighted because I think this is actually a really important point and I haven’t seen this talked about.
So what the Review Body have said, having given their recommendation for what the Review Body should be, it says, “These recommendations are made considering the evidence we received, reflecting the need to recruit, retain and motivate staff, while also considering affordability. As we discussed in Chapter 3, decisions about how to fund pay awards across our remit group, whether through increases to department budgets, or to fund them from existing budgets, are a political choice with that sits with the Ministers. These dynamics also apply to general medical and dental practises” – and this is the important bit – “for whom we would expect appropriate funding arrangements to be made so these recommendations can be passed on to salaried GMPs and associate GDPs.” So what they’re saying here is that they think of 4.5 per cent payword is about right, but actually it isn’t funded from the current resources made available to GPs or general dental practitioners, and that they have to be funded in addition to what they’re currently getting. So full 45 per cent is the pay award and there should be some extra money being made available to fund this.
Interestingly, I noticed in the Review Body report from last year, they made a similar observation. They made a pay award and said there should be further funding made available to meet this, which I don’t think there was. But this is important. It’s not supposed to be 4.5 per cent out of existing sources.
On an entirely separate note, I’m very proud to say that Ramsay Brown, our practise, have been chosen to be a finalist, or won the position of being a finalist, in the Accounting Excellence Awards, particularly in the Client Service Team. If you look at the characters in the poster, none of them are anything to do with Ramsey Brown, it’s just the fly that they sent out. We’re very proud to have our efforts recognised in this way. There will be a big to-do later in September, which we hope we will win, but even if we don’t win, to make the final is something that we’re very pleased with. And finally, I want to let everyone know that my partner, Katie Collins, has had a little girl, name currently undecided, but we’re very pleased for Katie and her husband Jason, and we wish her well.
That about wrapped it up for July. Big thing, of course, is the Review Body. If anything else in this has piqued any interest and you’d like to take some advice, get some advice us from our team, then you are more than welcome to do so.
Tax Free Benefits For Employees
