How can we prevent loss of rent reimbursement?
Have a close look at the Red Book, paragraph 51.16 and 51.17. This allows practices to earn a certain amount of private income but places a limit of 10 per cent of total gross income before rent reimbursement is abated. Market rent is paid for practice premises to be used for NHS activities, and it is deemed unfair to earn a substantial amount of private income without some reduction.
A practice breaching the 10 per cent limit is obliged to inform the PCT or risk fraud charges. There is a scale of abatement. If private income accounts for over 10 per cent but less than 20 per cent of total income, abatement is made of 10 per cent rent reimbursement. If between 20 per cent but less than 30 per cent of profits, the abatement is 20 per cent and so on. For private work partly carried out at the main practice premises and partly at premises not covered by rent reimbursement the abatement is 10 per cent for private earnings between 15-25 per cent,
15 per cent for earnings between
25-35 per cent and so on.
No abatement is made for private earnings conducted completely in premises outside the scheme.
To avoid future abatement (unless private earnings fall below the 10 per cent limit) take the work to a separate building. Remember, however, that a 10 per cent loss of reimbursement reduces gross profit less than 1 per cent. This may be worth bearing if private income is rising substantially.