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Practices could face loss of income by agreeing to managers' requests to review business rates, warns GPC

Exclusive GP practices have been urged to reject requests from NHS England and health boards to review their business rates over fears it could cost them income, the GPC and chartered surveyors have warned.

NHS England and health boards in Wales have asked GPs for permission to conduct a review of business rates, but GPC has warned that allowing them to do so would offer ‘no advantage’ at best and could at worst leave them out of pocket.

This is because any reduction in the business rates could potentially lead to a reduction in the notional rent reimbursements that are paid to practices.

GPC said that only the NHS stands to benefit from reviewing business rates, and it ‘strongly advises’ practices not to cooperate with requests.

The plea from NHS managers has come about due to a recent court ruling, which allows businesses and organisations such as NHS England to challenge the size of the business rates charged by councils.

But health boards and area teams need practices’ permission to challenge the rates, which are paid by practices and reimbursed by NHS England.

In a letter to practices dated 31 March, to which it has requested a response within 14 days, NHS England said it was looking at appealing business rates on a national basis.

It added: ‘However, since you are responsible for paying the business rates and NHS England simply reimburses you, your authority for NHS England or their agent to act on your behalf is required.’

The letter asks: ‘Could you kindly sign the attached pro forma granting NHS England the authority to act on your behalf and to receive any refund associated with the appeal?’

But GP Surveyors director Andrew O’Dowd said that both business rates and notional rent are determined by a valuation office agency or district valuer, based on the ‘quality and size of a building, and the type of area that it is located’.

Therefore, he added: ‘If a reduction in business rates is recorded, for example due to a difference in size, it is possible that this will be used by the district valuer to support a reduction in notional rent too.’

Meanwhile, the GPC finance committee has written to LMCs to warn that practices stood to gain nothing from signing the forms, as any rebates would ‘almost certainly be clawed back by NHS England or the health boards’ and practices could even end up being landed with fees related to the appeals process.

The finance committee guidance said: ‘Given the reimbursable nature of business rates, practices would receive no financial advantage in doing so but may be left with subsequent legal fees.’

Warning practices of a similar exercise initiated by Welsh health boards, GPC Wales chair Dr Charlotte Jones said that ‘a lower business rates assessment may be used to support reducing notional rent to the practice’.

As a result, she added: ‘GPC Wales strongly advises practices that cooperation with these requests does not seem to be in their best interests.’

For the GPC, the stand-off with NHS England comes amid frustration over a lack of progress on reviewing GP premises cost directions, with negotiations having stalled a year ago.

Dr Brian Balmer, GPC premises negotiations lead, said he regarded the risk to practice income from business rates reviews as ‘small’, but that the GPC was not inclined to do favours for NHS England relating to GP premises.

He said: ‘At the moment, I have to say why would we fall over ourselves to do NHS England a favour on premises, because we’re waiting for one or two favours from them?

‘NHS England is pushing this because they may gain, but there’s nothing in it for practices.’

An NHS England spokesperson told Pulse: ‘We have identified that a review of these business rates could result in potential savings for the NHS, and it is NHS England’s ambition to reinvest these savings into primary care. The review is not expected to have any negative effect on GP practices.’

Last year, the GPC pledged to hold NHS England to ‘ransom’ on premises negotiations until NHS England agreed to reinstate funding for trade waste disposal and reimburse stamp land duty tax.

Readers' comments (5)

  • How much to we trust nhse?I was going to say as far as I could throw them,but I dont even trust them that much.Do you think they would reinvest it in primary care of back fil Mr Nicholsons glaring holein NHS finances(secondary care).I wonder?

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  • TTFO.

    NHS England have taken every possible measure to cut income / make life harder. Cutting Occ Health provision was a particularly dastardly thing to do.

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  • I have been waiting for Notional rent to be the next target - cant see refusing to play being the end of this.

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  • A bit slow of the mark. The deadline set for end of March for this request means many practices have already signed. I was aware of the pitfall especially claw back with refunds of business rates from 2010. I contacted my Lmc and was advised signing this would have no impact in practices and would be a good thing to do. I'm glad I atleast amended the request adding the proviso that this is on the understanding there will be no financial consequences to the practice and no claw back or workload impact.

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  • Is there a NHS England department that hires people with a hatred of GPs?
    Do they have an ideas board which has 2 streams- 1) Reduce income. 2) increase workload. Bonus payment for hitting both with the same idea.

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