The NHS Long Term Plan: How will GP practices be impacted?
There is a tendency when new plans come out of the NHS for people to say they have seen it all before. Would this be a wise response to the Long Term Plan?
Pleasingly, there is an acknowledgement of the many issues in primary care and a commitment that investment in primary medical and community services will grow faster than the overall NHS budget. Spend should be at least £4.5bn higher in 2024, but the extra money will come with strings attached. If applied consistently, this will mean further change is coming for many GPs in England.
The Network Contract
A new ‘Network Contract’ will route the additional monies and will also incorporate local enhanced services currently commissioned by CCGs. This Network Contract will be in addition to existing GMS, PMS and APMS contracts. ‘Primary Care Networks’ (PCNs) will be responsible for these contracts and will typically cover 30-50,000 patients. Each network will be responsible for expanded community multidisciplinary teams along the lines of the Integrated Care Vanguards. The obvious question is, who will actually hold (and deliver) these contracts? In some parts of the country GP Federations are sufficiently developed to do so, and could then subcontract services to member practices or to other service providers as appropriate. In other areas super-partnerships are sufficiently large and geographically contiguous to do so, though they may be concerned about using their unlimited liability partnerships to do so. Elsewhere again, it is possible that existing community health providers may look to lead.
What is clear is that the Network Contract is supposed to facilitate ‘integrated community-based health care’ and all new money in primary care will flow that way. We are told that practice participation will be voluntary, but it is hard to see how practices will remain financially viable in the medium term if they do not participate.
Online GP consultations
Digital-first primary care will become a new option for every patient. Over the next five years every patient in England will have a new right to choose telephone or online consultations instead of face to face consultations. The plan states this will be ‘usually with their own practice or, if patients prefer, with one of the new digital GP providers’.
The plan goes on to say that a new framework will be created for digital suppliers to offer their platforms to primary care networks on standard NHS terms. It is therefore unclear whether the digital providers enabling online consultations are supposed to be suppliers of services to networks of GPs, or will be able to hold patient lists themselves.
Our recommendations
It has been clear for some time that any increases in funding will go to practices working at scale. Scale working has now been formalised into PCNs . In those areas of the country where there is already an obvious PCN in existence, the immediate focus should be on working out which approach to use for online consultations. Where there is not currently any single obvious PCN, practices would be well advised to reconsider their local joint working arrangements: be that though through federations, mergers, primary care homes or the like.
Remember that the new Network Contract will need to be held by an appropriate business vehicle (there is no indication yet of any restrictions on who could hold them) so you will need to consider who will be the local prime contractor.
We would be delighted to discuss how we can help practices and PCNs prepare for the imminent changes. Please contact Nils Christiansen in the first instance for a no obligation conversation about how we can assist.
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Will you pick up future liability for a final pay control charge?
Have you checked whether your practice has an NHS Pensions liability for “final pay control”? Final pay control can involve very large sums payable to NHS Pensions by a practice. We are aware of liabilities in excess of £100,000 arising as employees and partners retire.
What is final pay control?
Final pay control was introduced by NHS Pensions to discourage practices from paying inflated earnings in order to secure their staff a higher pension.
It is applicable to all Officer and Practice Staff members of the 1995 Section of the NHS Pension Scheme, including 1995/2015 transition members. In practice, this means non-GP partners and practice employees may fall within the rules. If, during the final four years of employment or partnership, a member receives an increase to pensionable pay that exceeds a defined ‘allowable amount’, the practice is liable for a final pay control charge.
Who has to pay the charge?
When the member draws their pension, NHS Pensions will calculate the charge and invoice the practice. Interest and penalties apply for late payment.
Where the member is or was an employee, the partners will be liable for the charge.
Where the member is or was a partner, the partners will be jointly liable, but who actually pays the charge will be determined by their partnership arrangements.
Key concerns
The charge may arise many years after an employee or partner has left the practice, as it is only triggered when the member draws their pension. The partners at the time the invoice is issued will have to pay the bill and then seek to recover monies from former partners if their partnership arrangements permit them to do that.
Although the rules are clear that an employee must not be made to pay the final pay control charge, they are less clear about non-GP partners. NHS Pensions will seek to recover the charge from all the partners jointly but how this cost is allocated between the partners is a matter for their partnership agreement.
The charge can seem unfair for non-GP partners who share in the profits, as these are inherently variable. For example if, four years before retirement, the practice had a poor financial year but this was successfully turned around, a charge may well be incurred. If four years ago there was an unusually profitable year, there would probably be no charge.
What can you do?
- When an employee or non-GP partner leaves the practice, you should check whether they are a member of one of the relevant schemes and calculate whether a final pay charge would be due. To do this, you will need to go back over the past four years of pensionable earnings, including any earnings paid by a former NHS employer during that period. If a charge is due, you should discuss with your accountant whether to accrue it in the partnership accounts.
- Where a non-GP partner is a member of one of the relevant schemes, you should consider updating your partnership agreement to make it clear how any final payment charge will be shared. We would be happy to check your partnership agreement for you.
- When merging with or acquiring another practice, as part of your due diligence exercise you should enquire about potential historic and future final pay control liabilities and ensure that it is clear who will be paying them. This should be set out in any GP practice merger or acquisition agreement which we can check for you.
- When a partner joins or leaves the practice, you should pay particular consideration to whether the final pay control charges should be accrued in the joining/leaving accounts.
Conclusion
If you are in any doubt about your situation, then give us a call. Contact Nils Christiansen on 01483 511555 or email n.christiansen@drsolicitors.com
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Integrated care provider contracts – opportunity or threat?
NHS England is currently consulting on a new Integrated Care Provider contract (ICP). This seeks to commission services on a whole population basis by providing primary, secondary and possibly tertiary health and care services together through one contract. This would result in one single provider being responsible for the majority of healthcare delivered to a locality. Here, we share our views on the impact the ICP contract could have on GP practices.
As currently drafted, it is a condition of the ICP contract that primary care services are included in the scope of the contract. It allows for two routes to delivery: partial integration or full integration.
1. Partial integration
Practices will retain their current GMS/PMS contracts and independent status, but will sign a legally binding ‘integration agreement’ with the ICP provider to support them in the delivery of integrated services.
The idea with this model is that it doesn’t fundamentally change the way that primary care operates today, so is likely to be much easier to achieve. Practices simply formalise the obligations on all parties necessary to achieve a better functioning, more integrated healthcare system, and agree to share the risks and rewards.
There is an implicit assumption by NHSE that a local Trust will hold the ICP contract and that GP practices will be happy to sign the integration agreement with the Trust. In reality, practices would be well advised to obtain legal advice before signing such an agreement, since the current template contains some surprising clauses, such as unlimited liability in the event of certain things going wrong. Any changes should be negotiated with the ICP provider during the tender process, as signed integration agreements are a pre-requisite to winning the ICP contract so this is when practices would have most negotiating leverage.
2. Full integration
In this variant, GP practices would ‘suspend’ their GMS/PMS contracts and instead either be acquired by the ICP provider or subcontract to the ICP provider on terms to be agreed directly between the parties.
This is clearly much more radical than partial integration as it moves primary care towards being a salaried service. There is provision in the standard ICP contract for salaried GPs to be on BMA model terms, but this is unlikely to be much consolation for those that wish to remain as independent contractors. If GPs find that the new arrangements do not work, there is an option to un-suspend their GMS/PMS contracts, but it is not, at present, clear how this would work, since most practices in an integrated model will cease to exist as independent businesses in any meaningful sense.
Other significant changes in a full integration model include:
- Practices will no longer negotiate with NHS England, CCGs or Local Authorities. They will either be subsumed into, or contract with, the sole ICP provider. This largely removes the statutory role of LMCs.
- Whilst there appears to be an assumption that Trusts will usually be the ICP contract holder, there is no reason why this should be the case. Indeed, CCGs will be obliged to offer the ICP contract for competitive tender. This puts primary care in the driving seat, since it is not possible to win an ICP contract without the support of primary care. This makes it highly possible that well organised GP federations or super-partnerships could successfully tender in due course for ICP contracts, or agree to partner up with other public or private partners to do so. Hospitals and other community care providers would then have to subcontract from GPs, not vice versa. This would be an interesting situation as it could provoke accusations of privatisation.
Conclusion
The imminent arrival of ICP contracts has already prompted change up and down the country. We’ve seen hospital Trusts acquiring an interest in local GP practices, which could be a first step towards a fully integrated model. In some areas, the whole locality is actively preparing for the partially integrated model.
One thing is clear, and that is the fully integrated model in particular would represent an enormous change to the way primary care has always worked. Whilst change always presents an opportunity for some, it will inevitably present challenges to others.
If you would like to discuss the ICP contract or any other matters with one of our specialist solicitors, please contact Nils Christiansen on 01483 511555, n.christiansen@drsolicitors.com for an initial chat.
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What can GP Partnerships learn from other professional practices?
What can GP Partnerships learn from other professional practices?
Although we are very supportive of the GP partnership model, we believe that it needs to evolve to meet changing demands. The ongoing GP Partnership Review has issued a call for evidence and we are delighted to respond in this blog with further thoughts on some of the ‘Key Lines of Enquiry’. We would encourage our readers to also respond to this important review.
We explained in our previous blog why we believe partnerships have proven to be good business models for the professions, and also our belief that LLPs should be permitted for GPs – as they already are for solicitors and accountants.
Some of the challenges faced by GPs are industry specific, whilst others are not. Those common to all the professions include a very significant increase in female participation rates; a perception that Millennials have different values compared to previous generations; an increased demand for work-life balance; a changing competitive and regulatory environment; and a feeling that technology is on the verge of disrupting the profession. Challenges which are more GP-specific include the need to move towards more integrated models of care; the risks involved in financing increasingly expensive and specialised buildings which cannot easily be re-purposed; and a chronic shortage of GPs.
What are some of the key differences?
GP Partnerships are surprisingly homogenous in their structure. They generally comprise partners who jointly run the practice on profit shares reflecting sessions worked; employed GPs on BMA model contracts or similar; and locums on call to fill sessional gaps. This has been the model for as long as anyone can remember, albeit that the balance between the categories has altered significantly over the last decade.
Other professions have sought to develop multiple career paths, and more varied remuneration models. Senior partners will be responsible for management of the business, but other partners and senior staff will have little direct management responsibility and instead be focused on matters like ensuring technical expertise or service delivery. More junior staff will have the opportunity to develop their skills through close working with a variety of partners, and through a structured career progression path. This path may change over time as someone focused on technical expertise may, for example, later decide to move into business or delivery management. In essence, they are seeking to turn generalist professionals into specialists.
Reward typically comes in the form of both recognition and pay. Recognition is typically in the job title, and there have historically been many levels both below and within the partner grade. Pressure from the Millenials is leading to flatter structures, but there is generally still a clear structure. As the structures have flattened, variation in total pay at each grade has increased significantly. This has been helped by an increased focus on performance related pay – at level of the individual, the department, and the business.
In this way other professions seek to encourage and reward developing particular deep skills, and to recognise that business management is a separate career path which requires appropriate training and experience to achieve. By offering multiple roles and career paths, it becomes easier for individuals to see paths for personal development as well as options for changing their role as their life situation and their personal definition of work-life balance changes.
How could this be translated into Primary Care?
Whilst many of the models common in other professions are easier to achieve in larger practices, the GP partnership model will not survive unless being a partner is considered aspirational, and the rewards reflect both the importance of the role and the real risks and commitment required to do it well. At the moment all too many GPs have no desire to become a partner and who can blame them when the job can be little different from being a salaried GP or locum but with lots more risk and responsibility?
Part of the answer is to find ways to reduce real and perceived risk. Permitting LLP structures could help, as could carefully constructed working-at scale models. However, the biggest risk is usually the surgery building, and it is hard to see how this risk can be reduced without the State acting in some way as guarantor of last resort. Whilst this might upset some ideological purists who would argue that this ‘benefit’ is not afforded to other professions, it is in reality more a recognition that the buildings are increasingly specialised and the State will therefore be funding NHS services from the building whoever happens to be occupying it from time to time.
The other part of the answer is making the role more attractive by disrupting the current uniformity. Larger practices (or potentially innovative GP Federations) could develop more varied and interesting career paths as routes to develop through the organisation, and smaller practices could be encouraged to innovate by, for example, sharing clinical resources, developing specialisms, involving non-GPs in the running of the practice, and encouraging greater staff involvement in the business (sometimes described as the John Lewis model). Practices could also experiment more with performance related pay, particularly for salaried staff. Over time a variety of models for a career in General Practice would develop, and practices with the more successful approaches would find it easier to attract and retain staff.
For more expert advice, download our free guide:
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Disaster strikes the surgery! Are you sufficiently protected?
In normal times, GP surgeries happily practice out of their premises with no major issues. But what happens if a disaster strikes – maybe in the form of flood, fire or storm damage to your premises? This blog aims to highlight some important matters you should consider to make sure you protect your business from unexpected interruptions.
Understand the risksâ
It is important to ensure that you have adequate insurance and contingency planning in place to deal with the unexpected. If, for example, your premises flood or are damaged by fire, you could be obliged to:
- find and pay for new premises to operate from on a temporary basis;
- repair the structure of the building;
- repair & redecorate the interior of the building;
- replace all damaged contents, including medical supplies, refrigeration units and IT equipment;
- pay for clear up costs.
If you are a tenant of leased premises, you may think that the landlord’s building insurance covers you for some, or all, of the above, but that is rarely the case. Typically, the landlord is only obliged to insure the structure of the building and not your contents. Nor are they under any obligation to provide you with alternative temporary premises. It is, however, likely that the rent you pay to the landlord (for your damaged building) will be temporarily suspended if you cannot occupy the premises.
Perhaps the biggest risk â
It’s not only the immediate costs you incur as a result of a disaster, but a longer term risk to your business. If, for example, you are left unable to carry on providing some or all of your services and find yourself having to cancel certain clinics, you may be at risk of beaching your NHS contract. Under your contract you are obliged to be able to provide services from agreed premises at agreed times. Whilst the commissioner may be sympathetic to your plight, ultimately they will want to understand how you will continue to see patients. If you are unable to satisfactorily explain this, you risk receiving a Breach Notice.
Safeguard your positionâ
Having a disaster recovery plan in place is vital, as it is not easy to think with a clear head during a disaster. Be sure to keep an easily accessible copy of your disaster recovery plan off-site too – it’s no good to you if it’s destroyed by fire – and ensure that all the staff understand what they should do. The disaster recovery plan should cover a variety of different scenarios, but from a premises perspective, you should ideally have an agreed back up location in place, such as temporarily opening in the village hall or sharing a neighbouring surgery.
It may sound obvious, but ensure sufficient insurance is in place. Review the value of your contents cover regularly to ensure it remains adequate, particularly when you purchase a new piece of valuable equipment.
You may want to consider taking out ‘business interruption’ insurance, which could help with the emergency costs and any loss to your business as a result of an unexpected disaster. Speak to your insurance broker to get advice as to what would be appropriate in your particular circumstance. If you don’t have a broker, we would be happy to introduce you to specialist healthcare brokers through our network.
Conclusion
Disasters can be expensive but they don’t have to be catastrophic. Proper planning and protection will help ensure you can continue to deliver services to your patients safely and with minimum disruption.
If the worst happens and your practice does find itself ‘homeless’, then we recommend you take professional advice early on to understand your rights and confirm your responsibilities.
If you would like to discuss anything in this blog, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com.
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Do you have unclaimed capital allowances?
You will need to claim capital allowances if you are to enjoy the benefit of them. It is our experience that not all GP practices promptly claim their full value. This can be a deliberate policy or simply an oversight. Left unclaimed, most capital allowances simply carry forward into subsequent years.
Some of the largest (and most commonly unclaimed) capital allowances are associated with premises improvements. In the event a property owning partner is bought out, the unclaimed capital allowances would normally remain with the partnership for the benefit of the remaining partners. This could result in a new partner using any unclaimed capital allowance to reduce their own tax liability, even though it was an outgoing partner who participated in the original investment giving rise to the capital allowance.
As the value of capital allowances can be significant, this is a potential source of conflict amongst partners. In this blog, we share some common scenarios together with some pros and cons so you can agree the right decision for your practice.
Who should benefit from them?
Usually, the existence of unclaimed capital allowances will be reflected in the price paid by a buyer. Unclaimed capital allowances increase the inherent value in a commercial building, so would increase the price in a ‘normal’ transaction, however they are often not taken into consideration in GP surgery valuations – even if the partners are aware that unclaimed allowances exist.
What can you do?
- Research
We are aware of occasions when partners discover very large bought forward unclaimed capital allowances. A nice windfall for the current partners perhaps, but any former partners would wish they had researched the position before retiring.
- Don’t delayâ
The common business practice is to claim capital allowances as quickly possible. This reduces the risk of a problem arising as well as reducing the partners’ tax bills.
- Document your positionâ
If you decide to leave significant amounts of capital allowances unclaimed, or you retire before you have claimed all of the allowances due, you need to agree with your partners how to deal with this. If the surgery building is a partnership asset, you should also have on record that it is only the owning partners that benefit from any capital allowances.
- Consider the accounts.
One option is to record the unclaimed allowances as an asset in the partnership accounts, or at least to do this when creating retirement accounts. Your accountant may be willing to do this if he considers the allowances ‘realisable’.
- Be consistentâ
Should you wish to allocate capital allowances to a retiring partner before they have been claimed in full, you will also have to agree this between the partners. In this case, you would agree that the unclaimed allowances are an asset of the partnership and that they should be valued appropriately when the retirement accounts are drawn up. You should however ensure that you are consistent over time in the way that you do this.
Conclusion
This may appear an obscure technical matter, but large sums can be at stake. If the ownership of these is left unclear, it can be a recipe for a partnership dispute. Practices would be well advised to ensure they understand whether they have significant unclaimed capital allowances, and if so to agree how they wish to deal with them. This should then be cross checked with the Partnership Agreement to ensure it is consistent.
If you have any questions specifically about capital allowances, then you should contact your accountant in the first instance. For assistance in documenting a relevant policy or for updating your partnership deed to deal with the position, please contact Daphne Robertson on 01483 511555 d.robertson@drsolicitors.com
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Is the GP Partnership Model past its sell by date?
There is currently much discussion about whether the partnership model for General Practice is still fit for purpose. It is clear that the model is under severe strain, and the Secretary of State has commissioned a review into how it might need to evolve. In this blog we draw on our experience of working with over 1,000 practices to offer our thoughts on the future of the partnership model.
Background & context
In common with other professionals like lawyers and accountants, GPs have traditionally organised their businesses as either sole practitioners or partnerships. The partnership model for General Practice long predates the NHS, and indeed the NHS Act 1948 had surprisingly little impact on the business model as GPs retained their independent contractor status. The GP Partnership model has served the profession well over the years, but it is interesting to compare GP practices with what has happened in the law and accountancy. Most other professionals still organise themselves as partnerships, but they are typically managed very differently to GP partnerships.
Partnerships are simply one of many ways of running a business. Most businesses are actually run as limited liability companies, so why is this much less common in the profession? The answer is that Limited Companies are designed to separate out the ownership from the management, and to provide more flexible options for financing. This is very useful in capital-intensive businesses that require multiple layers of management. The professions, by contrast, sell the skills of highly trained people who are largely able to self manage. Such businesses typically require only low levels of finance, which can be easily secured through mortgages and bank loans. There is therefore no need to separate ownership and capital from management.
Benefits of Partnerships
Partnerships, by their very nature, pool the risks of the business between the partners. This shared risk-taking strongly encourages collaboration. All the professions encourage members to understand their own limitations, and to seek the advice of colleagues when they come across something new or unexpected. This requires the kind of open, trusting relationship which forms naturally in a partnership, but which can be more difficult to forge in a hierarchical employer/employee relationship. This in turn creates an environment where tacit skills are easily transferred. These are the kind of human skills which will never be mastered by Artificial Intelligence, but which form the bedrock of what GPs and other generalist professionals do. Investment in the partnership encourages a long-term commitment, which is of course well aligned to ensuring continuity of patient care. The model is also very flexible: there are very few laws about running partnerships so you are largely free to contract with your partners about how you want to run things, and to change this agreement over time as the needs of the business evolve.
Problems with Partnerships
Unlimited liability is one of the most obvious problems with traditional partnerships. It used to be felt that limiting liability was inappropriate for professionals as it might encourage them to act recklessly. However, this idea evolved as society became more litigious, and limited liability partnerships (LLPs) have been permitted since 2000. Most accountants and solicitors have since become LLPs, but this structure is not currently allowed for NHS GP partnerships. Finance has also become an issue as partnerships take on bigger risks, particularly in the form of long-term leases or larger freeholds. Small partnerships risk becoming unviable when there is concern about becoming ‘the last man standing’ with large financial obligations – particularly when these are unlimited and there are recruitment issues. Lastly, there is a generational question over whether younger professionals actually want to manage themselves anymore, or whether they would rather be ‘managed’ as an employee or locum.
The future
The benefits of the partnership model in a generalist profession are, in our opinion, significant. In many ways they underpin the key cultural values of the professional, but many commentators miss this link and assume an organisation’s values are completely independent of the business vehicle. This is not our view. However, the GP partnership model does need to change. There is no obvious reason why GPs should be prevented from forming LLPs, and larger partnerships would enable practices to better deal with the increased finance and risk in modern general practice. There is undoubtedly a role to play for a variety of business models in primary care, but we believe that an evolved partnership model still has an important role to play. We will be exploring this further in subsequent blogs as we provide our input to the Key Lines of Enquiry of the Partnership Review.
For more information about the GP Partnership Model and any other related topics, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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What pregnancy and maternity rights does a partner have?
A partner is a business owner and employer, which by definition means they are not an employee. As a consequence, partners do not benefit from all the various employment protections afforded to employees. Despite this, we are often asked about partner entitlements, particularly regarding maternity and childcare.
What is the legal position?
Partners do not benefit from statutory maternity and childcare entitlements, although they are protected from being discriminated against by reason of their pregnancy and maternity, gender and marital status under the Equality Act 2012.
Broadly speaking, the Equality Act provides that women should not be subject to “less favourable treatment”, or subject to unreasonable requirements that they cannot meet because of their pregnancy/maternity or childcare commitments.
The majority of the maternity rights for a partner will be set out in their partnership agreement. These will be binding unless they are found to be discriminatory. In the absence of a partnership agreement, there are very few automatic rights that will accrue.
Common Issues
Particular issues where liability under the Equality Act could accrue include:
- Not engaging or promoting someone to Partner because of concerns that they will be absent due to maternity leave, or won’t be able to “pull their weight” because of childcare commitments;
- Not allowing for any maternity leave at all or a very short period only;
- Not allowing a female Partner who has a pregnancy related illness the same sickness absence entitlements as other sick Partners;
- Reducing profit share during maternity leave;
- Not accruing holiday leave during maternity leave;
- Not allowing a partner to work part time or change session times to deal with childcare commitments.
None of the above are entirely clear-cut and would need to be looked at on a case-by-case basis. For example, the Equality Act certainly indicates that holiday leave should accrue in the normal way during some of a partner’s maternity leave, but it is less clear whether this would accrue during the entire period of their absence.
Practices should be aware that they can claim under the SFE for payments to cover locum expenses during maternity, paternity and adoption leave. The common practice is that the absent partner continues to receive profit share whilst the SFE payments are being received. However, if you wish to do this, you will have to ensure that this is set out in your partnership agreement.
Conclusion
This is an area of law that is both complex and uncertain. There is only a limited amount of case law applying specifically to Partners, so each case is likely to be determined on its own merits.
Practices should be very wary of opening themselves to the risk of a discrimination claim, as these have unlimited liability. The best protection is to:
- Ensure that the practice has a clear non-discrimination policy in place which includes discrimination on the grounds of maternity and childcare commitments.
- Make clear that this policy applies to all staff, including partners.
- Ensure that the Partnership Deed is professionally prepared, that it is clear on the subject of maternity and other forms of leave, and that it is kept reasonably current as the law changes. Anything drafted more than 3 years ago may well be out of date with current best practice.
If you have any questions about this or any other matter, please contact Daphne Robertson on 01483 51155 or d.robertson@drsolicitors.com
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What does GDPR mean for GP Practices?
What is GDPR and what does it mean to be compliant?
I am sure that you will all by now be aware of GDPR. GDPR comes into effect on 25th May 2018 and seeks to give individuals more control over how organisations use their data.
GDPR is a European regulation, and automatically becomes law in the UK because of our membership of the European Union. Although Brexit would take us out of the European Union, the current plan is to incorporate all EU law into UK law, so GDPR is almost certainly here to stay.
Confusingly, the UK Parliament is drafting its own data protection law called the Data Protection Act 2018 (DPA 2018). This law will supplement the GDPR and replace the existing 1998 Data Protection Act. The DPA 2018 is still working its way through Parliament so is not finalised. Much of the commentary on ‘GDPR’ combines it with the DPA 2018, and so mixes actual law with a draft bill.
Who does it apply to?
GDPR applies to all individuals and businesses who have responsibility for handling personal data. GP practices are ‘data controllers’ registered with the Information Commissioner (ICO) and are responsible for deciding how and why data is processed.
In our experience, practices have long been familiar with the concepts of data confidentiality, but GDPR requires additional levels of process and control, and forces practices to think about all personal data, not just the confidential health data they hold.
The key to understanding compliance with GDPR is not to see it as a tick-box exercise to be completed by 25th May, but rather as developing and embedding a permanent change of culture, whereby protection of personal data is central to every decision made within the practice. When all staff are able to recognise personal data and make informed decisions about protecting and processing it, and know what to do in the event of a breach, you will be well on the way to compliance.
What can GP practices do to prepare for GDPR?
- If you haven’t found it already there is a very helpful 12 Steps to Take Now and Data Controller Self Assessment Toolkit on the ICO Website. Given that the ICO is the data regulator, they are the best place to start with your preparation.
- It is critical that practices can demonstrate that they have sought to comply. The ICO has been clear that they are looking to see reasonable efforts being made. To do this you will need to have identified, documented and explained the legal basis for all the data flows to and from the practice. This is likely to be a time consuming undertaking and will be difficult to do unless you have a member of staff who is familiar with documenting processes and data flows. Remember that this documentation will have to be kept up-to date, so be careful not to outsource all your understanding of this information audit.
- Data Protection policies and procedures must also be updated. Many practices have historically relied on ‘template’ policies, but these are unlikely to be adequate, as procedures will have to relate to the data flows identified in the information audit.
- Privacy Notices are another important part of GDPR. These must be displayed prominently, which as a minimum is likely to be on the practice website and the noticeboard. Practices should think hard about opportunities to draw patient attention to these Privacy Notices, since one of the key principles underlying GDPR is transparency about how you deal with data. New information which must be added to privacy notices includes how you intend to use data, and the ‘lawful basis’ for what you are doing.
- Be aware that much health data falls under one of the GDPR special categories. In addition to the ‘lawful basis’ that all data controllers must identify, practices need to satisfy a second separate condition that the processing is necessary for the purposes of healthcare.
- Staff training is also an important part of compliance. Practices will need to be able to demonstrate that they have trained all their staff, including Partners, in GDPR and have an ongoing program to ensure that they are kept up to date as the law changes.
- One significant change is that practices can no longer charge patients for access to their medical records except in exceptional circumstances. This may unfortunately increase the administrative workload as patients and others get used to making ‘subject access requests’. The time limit for dealing with these has been reduced from 40 days to one month.
- An interesting example of the current uncertainty is the role of the Data Protection Officer (DPO). Under GDPR, it is not at all clear that practices are required to appoint a DPO. However, the DPA 2018 if enacted in its current draft form would certainly require practices to appoint a DPO.
So what happens if there is a breach and what are the risks of non-compliance?
In the event of a data breach affecting patient’s privacy rights, you must notify the Information Commissioner’s Office (ICO) no later than 72 hours after you become aware of the breach. If the breach is likely to present a high risk to their data, the patient must also be informed. You should have a clearly documented process for managing a data breach. This is another example of how proper documenting of processes and staff training is going to be vital.
Conclusion
It is important that practices take ownership of GDPR themselves. Compliance is not really something that can be outsourced, although there are plenty of commentators looking to profit from it. The ICO have made clear that the world will not end on the 25 May 2018 as they realise this is a journey for all businesses and they want to be supportive rather than punitive, but they will want to see evidence that practices are taking data security seriously throughout the organisation.
If you are concerned about your GDPR readiness, then please give us a call and we would be happy to talk through your plans. In our experience, most local medical committees are also aware of what needs to be done and are able to assist members and share good practices on GDPR.
If you would like to discuss GDPR or any other legal matter, please contact Nils Christiansen on 01483 511555, n.christiansen@drsolicitors.com
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Stamp Duty Land Tax on Surgery Leases
Stamp Duty Land Tax (SDLT) was introduced in December 2003. It is a tax payable on a variety of property transactions, including purchases and transfers of freehold and leasehold land and property.
GP Practices sometimes believe they are exempt from SDLT because of the ‘partnership exemption’. Whilst this may be the case for some transactions, the truth is unfortunately much more complicated.
What types of transaction are liable for SDLT?
SDLT is payable on UK land transactions that have a chargeable consideration – for example, on the purchase price of a property, or when a lease is granted.
For the purposes of SDLT, a chargeable consideration is defined by HMRC as “anything given for the transaction that is money or money’s worth”. When the value of a transaction rises above a certain threshold, the purchaser is liable to pay the tax.
The calculation of SDLT on the grant of a new commercial lease depends on the length of the lease, the premium paid (if any) and the rent payable under the lease. A helpful SDLT calculator can be found on the HMRC website: www.gov.uk/stamp-duty-land-tax/nonresidential-and-mixed-use-rates
Who is responsible for paying SDLT?
It is the responsibility of the purchaser or tenant (upon the granting of a lease) to calculate the amount of tax and complete and submit a Land Transaction Return (SDLT1) to HMRC within 30 days of the effective date of completion of a transaction.
A solicitor can help complete this on behalf of the purchaser or tenant, but legally the purchaser is responsible for the accuracy and timeliness of the information submitted. Failure to submit the Land Transaction Return and/or to pay SDLT on time will result in penalties. Interest is charged on both late paid tax and outstanding penalties.
Joint purchasers, such as a partnership, are jointly liable to pay the tax, although the proportion that each individual partner should pay can be subject to private agreement within the partnership.
Additional points practices should be aware of:
- SDLT regulations for freehold and leasehold properties differ.
- SDLT may be payable on certain changes to the lease. For example, lease renewals have the same SDLT implications as new leases.
- A sale and leaseback would normally trigger two payments of SDLT; one by the purchaser of the surgery and the second by the tenants on completion of their lease. However, you can claim tax relief on the lease element of the transaction if the seller and the tenant are identical. Be aware though that this doesn’t get you off the hook for ever – the SDLT will become due on the first lease assignment.
- If SDLT was paid in full when the lease was originally entered into, it is only payable on the premium element of any lease assignment. As most GP surgery leases are 25 years or less and have no premium value, surgery lease assignments are usually SDLT free.
- Some changes in partnership arrangements may incur SDLT. This is a particularly complicated area, but introducing and withdrawing property from a partnership are both chargeable events, regardless of whether the name on the lease or at the Land Registry changes.
- If an original lease term expires, but the tenant remains in occupation of the premises, it is called holding over. Once the lease runs past its contractual expiry date, it is treated as if the original term of the lease has been extended by one year. If SDLT was paid at the outset of a lease, or if the additional year takes the lease over the SDLT threshold, then a further SDLT return will need to be filed with HMRC and relevant tax paid. This is required for each subsequent year the lease is held over.
If a rent review occurs within the first 5 years of a lease, SDLT should be recalculated using the new rent for the remaining years, and a new submission made to HMRC. This can result in either additional tax to pay, or a refund in the event SDLT has been overpaid.
If you need advice on SDLT payments for your practice or any other matter related to your Surgery building, contact DR Solicitors on 01483 511 555, or email at info@drsolicitors.com.