Accountant Morag Miller explains what potential candidates should consider before signing up for the £20k ‘golden hello’ scheme
What is the new scheme?
The scheme was launched as part of the 2020/21 GP contract, and enables new partners to be paid a lump sum of up to £20,000, supported by a further 20% contribution towards tax and National Insurance (pro rata per full-time-equivalent GP), to develop their position in their first five years as a partner.
In year one, training funds of up to £3,000 will also be available for each successful applicant to develop non-clinical partnership skills.
Who is eligible?
The scheme is open to GPs, nurses (including ANPs), pharmacists, pharmacy technicians, physiotherapists, paramedics, midwives, dietitians, podiatrists, occupational therapists and mental health practitioners working in general practice, when joining a partnership for the first time.
Practice managers are not currently eligible, but NHS England has indicated it intends to include them in future and that further guidance will be published in due course.
Participants can apply for the scheme only once. To be eligible they must:
• Comply with the requirements of a partner as set out in s86(2) of the NHS Act 2006.
• Be registered with the appropriate professional body.
• Deliver clinical care to patients through a GMS, PMS or APMS contract (APMS contracts must have a minimum of two years remaining).
• Have an equity share partnership arrangement in place, signed and dated after 1 April 2020, and not be salaried within the same practice.
• Commit to holding a partnership role (at any eligible GP practice) for five years.
• Work a minimum of two clinical sessions per week throughout the five-year arrangement.
• Not have been a partner in a GP practice elsewhere in England.
Returners and international recruits can apply, as long as they meet the eligibility criteria above.
One of the overarching aims of the scheme is to support and stabilise the partnership model. As such, GPs working within an incorporated practice (company) will not be eligible. If the partnership incorporates at any time during the five-year scheme participation, clawback of scheme funds can be expected.
How does the payment vary with working arrangements?
Full-time working is defined as 37.5 hours per week. Part-time partners (minimum requirement of two clinical sessions per week – 8 hours 20 minutes) can apply to the scheme with the £20,000 sum and 20% contribution calculated on a pro-rata basis.
The £3,000 training fund is per successful applicant and is not pro-rated. However, to meet the reimbursement requirements, participants should start their non-clinical partnership skills training in the first year of the partnership role. All receipts will be required to support any claim.
Subject to parliamentary approval, the £20,000 (pro rata) sum and 20% contribution will not be superannuable but will be subject to tax and NIC.
So, what appears to be a generous scheme from NHS England soon diminishes in value if your taxable income exceeds £50,000. The greater your taxable earnings, the less return you will receive from this scheme due to increased tax rates you will be subject to, alongside the National Insurance payable.
Furthermore, income will be taxed in the year of receipt, irrespective of when you receive the funding from the practice (although the practice is obliged to pay the funds to you within 28 days of receipt) so make sure you keep sufficient funds aside to cover any additional tax and National Insurance charges.
Successful applications to the scheme will trigger an s96 contract-specific variation for the practice. This variation must be signed and returned to the issuing authority within one calendar month of receipt, following which the funds will be released to the practice.
The scheme is portable should you move to a new practice as a partner, but reducing hours or leaving partnership altogether within the first five years will result in a clawback of funds. This will be calculated at a rate of 20% for each incomplete year (on the £20,000 sum and 20% contribution).
This means an FTE partner with a scheme payment of £24,000 would have to pay back £14,400 if quitting as a partner during year three (although this would be a tax-allowable expense).
Conversely, increasing hours may give rise to additional money (subject to the FTE cap and years remaining in the scheme), paid following the annual reconciliation process.
No one knows what the future holds, so you may wish to put some funds aside to cover potential clawback. Ringfencing and releasing a fifth of the funds to your disposable income on completion of each whole year as a partner in the scheme will help manage your financial obligations should your partnership status change during the life of the scheme.
Participants who are absent due to maternity, paternity or adoption leave, or long-term sickness, will not be subject to clawback, as long as the position of partner is maintained throughout.
Morag Miller is a partner and head of healthcare services at Armstrong Watson LLP, a member of the Association of Independent Specialist Medical Accountants