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News & Portal: Tax

Golden Hello Scheme for New GP Partners

17 July 2020  
Posted by: Philip Redhead
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The Golden Hello scheme (Targeted Enhanced Recruitment Scheme) for new GP partners finally started on 1st July 2020 and is open to new ‘first time’ GP partners who started on or after 1st April.

This scheme makes available payment of up to £20,000 to new partners in GP practices along with contributions of up to £4,000 towards the on-boarding cost and a further £3,000 for non-clinical training for new partners to help them with the transition to self-employment and healthcare business.

The payment will be subject to a claw back of 20% for each year (up to five years) if a GP who received the payment quits their post, or on a pro rata basis if they reduces their hours below full time levels in the first 5 years.

 

Things to consider if you or a GP or surgery that received this payment

Tax: HMRC Have confirmed these payments will be Taxable on the recipient and this will increase personal tax liabilities accordingly. In particular if the payment pushes the recipient’s income over £50,000, they may face a High Earner Child Benefit Tax charge and if the
payment pushes their income over £100,000 the GP will also lose some or all of their personal tax allowances. These increases in tax payments may come as a surprise. (I can only hope that some of the additional non-clinical training will forewarn new GP of this).

Partnership Agreements: One of the conditions of the payments is that the new partner must have signed a ‘Legally-liable, equity-share partnership agreement’. In practice many surgeries’ partnership agreements are often woefully out of date and in some cased non-
existent. Therefore, for their new partners to be eligible practices may need to incur legal costs to either update or create these agreements. Partnership agreements are especially important for medical practices for a variety of reasons and the £4,000 payment to surgeries should be a golden opportunity to fund their creation and update.

Claw Backs: If a GP who received a Golden Hello leave the surgery in less than 5 years an element of the amount will be clawed back by the NHS. This will be deducted from the surgeries NHS income through the Open Exeter system and it will then be down to the surgery to recover this from the resigned GP. As many surgeries are aware this can often be extremely difficult (as
in case when additional pension contributions are collected by the NHS after a partner leaves). When renewing practice agreement, I would suggest discussing clauses with your legal advisers to indemnify against such claw backs or holding a retention of £4,000 per year, up to 5 years, to cover this clawback. I would also recommend doing the same for post resignation pension deductions.


About the author

Service: Accountancy, Audit, Business Advisory, Taxation

Specialism: Healthcare practices, Clubs and Associations, Professional service businesses, private clients and business and individuals in all sectors

Philip provides specialist tax advice and accounting services to Doctors practices and other medical professionals as well as dealing with all other business sectors, individuals and non-residents.

Philip trained with a local practice in Hornchurch in Essex. Since then Philip has developed his specialisms in GP Practices, Clubs and Societies, as well as providing detailed management support services to commercial owner managed clients.

Philip lives in Kent and enjoys running, water-sports and travel and is currently learning Tagalog (Filipino)


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