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Seniority payments and pension funds

ASK THE EXPERTS

NHS RULES

What is the situation regarding seniority payments to salaried GPs under the new GMS contract? I thought that, in GMS practices, seniority payments for salaried GPs should be passed on to the employee. If this is correct, presumably PMS practices would be obliged to act equitably. I am a salaried GP with nearly 15 years in general practice, many as a principal, and now, as a salaried GP, I find myself devoid of seniority pay.

Salaried GPs are not entitled to seniority pay through the statement of financial entitlements.

Your contract is for negotiation when you begin work with a practice and should reflect your experience to build in an element for 'seniority', but there is no question of passing on seniority payments.

Dr Tim Kimber

PENSIONS

Is it possible to take NHS Pension Scheme (NHSPS) benefits at the age of 65 without retiring from my single-handed practice?

Under the current rules, to take benefits then return to work without payments being suspended normally means retiring for a period of one month after benefits are taken before returning to work.

Where single-handed GP practices are concerned, it might be possible to negotiate with the PCT beforehand to facilitate this by taking on a locum during the one-month break. However, I would stress that it is vital for the position to be clearly established with the PCT before taking retirement, to ensure that everything is being done correctly.

Kevin Quinn

PARTNERSHIP

Our practice manager has asked to become a half profit-share partner.

Do you have any words of advice on the pros and cons of this? My enquiries so far have met with a definite dampened enthusiasm on the benefits and a flurry of examples of disadvantages.

Will your manager make a real contribution towards practice prosperity as a partner, as opposed to being a manager?

You should project profits to incorporate full implementation of this change and work out what a half share would be. This reward could be out of proportion, so the share might be less than half.

Having looked at the financial side, if you still want to proceed, you and the manager should consider the responsibilities and legal requirements needed to put this in place.

You also need to take into account the fact that your priorities, as clinicians, mightdiffer from those of the manager, who might be outvoted on a regular basis. So will being a manager partner be any better than being an employee?

These issues were set out with great clarity in MedEconomics (Six tips on making your manager a partner, January 2004), which is in the MedEconomics practice features section at www.gponline.com.

Stuart Williamson

PENSIONS

I entered medical school as a mature student and as well as contributing to the NHS Pension Scheme, I am also buying added years to maximise my pension fund. While I worked to parity and my income did not exceed the upper limit on NHS superannuable income, I had a private pension as well. Now I am a full-time principal with a profit share, my NHS superannuable income has reached the upper limit.

Can I still contribute to the private pension fund, using non-NHS income generated through private fees for items such as medical reports and private insurance examinations for companies?

Our accountant says NHS and non-NHS income are included as superannuable income, and that I cannot.

We need to look at the rules before the change in the definition of superannuable pay and the new rules that came into force on 1 April 2004.

Prior to 1 April 2004, the rules allowed a concession for GPs to contribute to the NHS Pension Scheme and personal pension plans. The GP could give up the tax relief on all the superannuation and instead claim tax relief on a personal pension, based on their taxable income from the practice after claiming personal expenses (net relevant earnings).

Alternatively, GPs could contribute to a personal pension on the 'private' element of their net relevant earnings and still claim tax relief on superannuation contributions.

The correct way to do this is to compare the GP's net relevant earnings to superannuable income (shown on form SD86). If net relevant earnings are more than superannuable income, the difference can be pensioned in a personal pension plan. If they are less, no contribution is possible.

When your accountants talk of NHS and non-NHS income taken together, they mightmean this.

The definition of superannuable pay changed on 5 April 2004. Instead of being based on the share of the practice's income, it is now based on the taxable income of the GP.

So in most cases, GPs' superannuable income will be similar to their net relevant earnings, leaving little scope for claiming tax relief on the private element of GP income.

The GP can continue to give up the tax relief on the superannuation and claim personal pension relief on the full net relevant earnings, but if this is too expensive, they might wish to look at alternatives, such as additional voluntary contributions, and stop contributing to the personal pension plan.

Jenny Stone

ASK THE EXPERTS

NHS RULES - Dr Tim Kimber is a Littlehampton GP and a member of West Sussex LMC. Email: tim.kimber@nhs.net

ACCOUNTING - Stuart Williamson is a partner at accountants Williamson West. Email: ww@williamsonwest.com

LEGAL - Lynne Abbess is a partner at solicitors Hempsons. They can offer 10 minutes of free advice only, from 10am-4pm weekdays. Phone: (020) 7839 0278

PREMISES - John Hearle is a chartered surveyor and chairman of Aitchison Raffety. Email: john.hearle@argroup.co.uk or fax: (01727) 844472

PENSIONS AND PERSONAL FINANCE - Kevin Quinn is a financial planner at Ramsay Brown & Partners. Email: kevin@ramsaybrown.co.uk

PMS - Dr Mo Dewji is a Milton Keynes GP and clinical director for primary care contracting. Email: mo.dewji@dh.gsi.gov.uk

ACCOUNTANCY AND TAXATION - Jenny Stone is a partner at Ramsay Brown & Partners. Email: jenny@ramsaybrown.co.uk or call (020) 8370 7746 9am-5.30pm weekdays

PRACTICE-BASED COMMISSIONING - Maggie Marum is a management consultant for the NAPC and runs its practice-based commissioning helpline. Call: 020 7636 8626. www.napc.co.uk

PLEASE NOTE

Please ask for 'GP Ask the Experts'. You may be asked to book a full consultation if your request is time-consuming or difficult. Our specialists retain the right to refuse advice. The information in the Ask the Experts list is for information purposes only. The expert advice is intended to provide general guidance only. It should not be relied upon by readers, who should seek further professional advice. No legal responsibility can be accepted by GP for the experts' answers.

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