GP Finance Update – Changes for 2008/09 Jenny Stone, ACA Ramsay Brown and Partners Ramsay House 18 Vera Avenue London N21 1RB Tel:

Minimum Practice Income Guarantee (MPIG) DDRB announce global sum payments to increase by 2.7% to £56.20 Any increase in global sum will simply reduce the correction payments Practices with MPIG will therefore not see an increase in core practice funding Future of MPIG What does this mean for PMS practices…..

MPIG Example

Extended Hours Access DES & choice & booking will be replaced with extended hours DES (equivalent to £2.95 per patient) 58.5 QOF points allocated to extended hours Extended hrs DES £2.95 per patient If don’t do extended hours will lose income However, need to consider costs of offering extended hours e.g. staff costs, costs of keeping surgery open for longer

Changes to Capital Gains Tax Major reform from 6 th April 2008 Capital gains taxed at a rate of 18% Indexation and taper relief which would reduce a capital gain abolished Introduction of entrepreneurs relief for business assets if individual ceasing trade Entrepreneurs relief will mean business assets effectively taxed at 10% Entrepreneurs relief can be claimed on more than on occasion up to a lifetime limit of £1m.

Capital Gains Example

Tax Relief on Capital Expenditure Purchase of fixture, fittings and equipment qualify for capital allowances Capital Allowances prior to 6 th April 08 First Year allowance of 50% Thereafter writing down allowance - 25% Capital Allowances from 6 th April % of cost up to annual Investment limit of £50,000 Writing down allowance – 20% Cars over £12,000 maximum £3,000

Taxation of Non-Domiciled Individuals Prior to 5 th April 08 Individuals who are UK resident, but not domiciled in UK, declare overseas income on basis of remittance From 6 th April 08 Non-Dom individual has been resident in UK for 7 yrs out of past 10 yrs Declare all overseas income & gains on arising basis If want to use remittance basis would have tax charge of £30,000 De minimis limit of £1,000

Tax Return Deadlines 08/09 Deadline for paper tax returns bought forward to 31 st October 2008 Tax returns filed online deadline remains 31 st January 2009 Automatic £100 deadline if late Can appeal against penalty of individual if tax paid by 31 st January

Superannuation Contributions for 08/09 Employee contributions increased from 6% Rate of 08/09 based on 06/07 earnings Employer’s rate still 14% Earnings Cap removed for employees cont’b Earnings cap still applies to GPs have added yrs contracts prior to April 08 and were previously capped

QUESTIONS?