Help for care homes – Infection Control Fund

In May, the Government announced a £600 million Infection Control Fund available for care homes.

The information on the Government website states:

  • £600 million Infection Control Fund to reduce transmission of coronavirus in care homes
  • This forms part of wider support for care home residents and staff, including by limiting staff movement, protecting wages and giving access to NHS personal protective equipment (PPE) training
  • Each care home in England to be given a named clinical lead to provide direct care for residents
  • A wellbeing package will be also launched on CARE Workforce app to support the workforce with Hospice UK and Samaritans

Source: https://www.gov.uk/government/news/care-home-support-package-backed-by-600-million-to-help-reduce-coronavirus-infections

Please speak to your local authority to establish what your care home is due to receive. We are aware that some local authorities are asking for retrospective evidence of how it has, or will be, spent. 

Information correct as at 10 June 2020.

PPE portal for small care providers

Over the next three weeks, small care homes and small domiciliary care providers will be invited to join a new online portal to order PPE.

The PPE Portal has been developed in collaboration with eBay to help primary and social care providers to order PPE.

A small residential social care provider is defined as one with 24 beds or fewer. A small domiciliary care provider has 99 clients or fewer.

Over the next few weeks, DHSC will be continuing to send out invites to small residential and domiciliary social care services, enabling them to order PPE online through the portal.

For further information on the content of this blog, please contact Deborah Wood on 01253 404404 or email deborah.wood@mooreandsmalley.co.uk

Blackpool medical accountancy expert appointed to lead influential body

A leading local accountancy expert has been appointed chairman of an influential network of firms specialising in the medical sector.

Deborah Wood, partner at MHA Moore and Smalley, was announced as chairman of the Association of Independent Specialist Medical Accountants (AISMA) on May 18.

AISMA is a network of UK accountancy firms specialising in the medical and healthcare sector which share knowledge, liaise with a number of government departments on key medical accountancy issues and promote the benefits of quality accountancy to doctors and medical practices.

Deborah has been involved with AISMA since it was established in 1995 and previously held the role of vice chair.

She said: “It has been a pleasure to work with and on behalf of AISMA over the past 25 years and I’m looking forward to what the next 25 hold for the organisation.

“As chairman, I would like to ensure that we continue developing the excellent relationships we have built with the British Medical Association, HMRC, NHS Pensions, NHS England/NHS Improvement, PCSE and their respective bodies and representatives in Scotland, Wales and Northern Ireland.

“This will allow us to represent the views of all clients of AISMA member firms for the long term sustainability of general practice and to promote the benefits of having high quality, highly knowledgeable specialist accountants and advisors available to work with GPs and their practices.

“A key area of my role in AISMA to date has been to support the training needs of our member firms and I am keen to ensure this hugely beneficial programme continues.”

Deborah is resident partner at MHA Moore and Smalley’s Blackpool office and leads the firm’s specialist healthcare services department. She is also chairman of the Moore and Smalley partnership.

Using her expertise, she has led AISMA’s representation of the sector on a range of key issues particularly relating to the complexities of the NHS pension scheme. This has included responding to government consultations regarding the pension tax charge implications of annual allowance taper rules which were finally addressed in the last budget.

AISMA Doctor Newswire – May 2020 25th Anniversary Special

In celebration of AISMA’s 25th anniversary, there is a special edition of AISMA newline.

The newsletter features the all time top 25 tips for GPs and practice managers, including advice on

  • practice accounts
  • business planning
  • cash flow
  • pensions
  • property
  • recruitment
  • tax.

The issue also takes a look back at the history of AISMA, and a reminder of the AISMA Charter.

There is also a statement from Deborah Wood, Healthcare Services Partner, who has been appointed Chairman of AISMA.

Management Accounts Healthcare

Managing cash flow, budgets and real time information

When assessing your practice’s financial performance for a given year, the first place you might think to look is the year end financial statements or “the accounts”. However, these tend to show what the performance of the practice was looking at from a historical point of view. To make decisions that are timely and relevant based upon accounting data, the practice should be monitoring performance regularly throughout the year.

One way of doing this is to produce management accounts, which can look at performance on a quarterly or even monthly basis. Assessing this information against budget expectations and monitoring cash flow are also essential to a well-run practice.

Why prepare management accounts?

  • Management accounts can be used for internal use by the management team and the partners to help provide up-to-date relevant information about the practice’s performance more frequently than year-end accounts, and in a concise, easy to interpret format that summarises all of the data – which the management may otherwise keep across a variety of spreadsheets.
  • The requirement to produce management accounts will necessitate the management team thinking about certain financial aspects of the practice on a regular basis that may otherwise be done only infrequently and at a time when they are of less relevance. This can help avoid problems at the earliest opportunity. Some recent practice fraud cases highlighted in the press demonstrate how important it is to regularly review the finances.
  • After a few cycles of preparing management accounts, trends for seasonal variations can be identified to help the practice alleviate certain pressures which fall upon the practice and its staff.
  • Management accounts may be a requirement from the bank if there is a possibility that your practice is looking to take out any arrangements for current or new loans soon. Having a system already in place for when it becomes a necessity in that circumstance will mean the management team are already accustomed to preparing the reports in a format accepted by the bank, and being able to show management accounts from previous periods when discussing a loan with the bank may facilitate its agreement.
  • Identifying and comparing costs throughout a year can highlight and justify if there is room in the budget to increase expenditure or to flag up when expenditure needs to be curtailed.
  • Timely identification of mismatches between expenditure and reimbursements (e.g. notional rent) will show up sooner and can be raised with the appropriate bodies to rectify.

How can MHA Moore and Smalley and our preferred cloud-based software help?

  • We recommend the use of Quickbooks (QBO) for the practice’s day to day bookkeeping.
  • If this is being used, the bank transactions which will form the foundation of the management accounts are already being inputted throughout the year by the finance team.
  • QBO can be used to track the income receivable and amounts payable by the practice and can automatically be set to update the debtors and creditors on the financial statements used for the management accounts.
  • Journals can be posted onto QBO which can be easily reversed in the following quarter. Furthermore, these journals can be set up using the same recurring template each time and with a reminder option to inform the finance team when a journal posting is due.
  • We can help you use QBO Management Reports to assist you to set up your own Management Accounts.
  • As well as helping with the initial process of identifying and setting up the journals the practice needs for management accounts, we can also review any management accounts produced for reasonableness, for the management’s peace of mind as to their accuracy or before they are presented to the bank if applicable.
  • Budgets can be set and these figures inputted into QBO enabling reports to be produced to show actual results against budgeted.
  • A cash flow statement can also be produced direct from the software to facilitate the monitoring of funds.

Next steps

If you believe that your practice would benefit from producing more regular reports and would like to hear how we can help your practice produce management accounts in addition to our year end services, please contact Matt Hodgson on 01253 404404 or your usual MHA Moore and Smalley Client Relationship Manager. Alternatively, you can email an enquiry here.

Help during the Covid-19 pandemic

During the Covid-19 pandemic, we appreciate that the sector is under extreme pressure to efficiently run some essential financial functions. We are able to provide temporary support to relieve the burden where possible and deliver finance functions which may have previously been done in house. Examples of this include;

  • Preparing management accounts
  • Maintaining the practice’s financial books and records
  • Assisting with VAT returns
  • Cash flow planning
  • Payroll services

Blackpool accountants help doctors claim Government coronavirus support

A Blackpool based accountancy and business advisory firm has collaborated with one of the UK’s leading medical bodies to help doctors and medical practices claim financial relief for vital work to fight the COVID-19 pandemic.

Through its work with the Association of Independent Specialist Medical Accountants (AISMA), MHA Moore and Smalley has contributed to a reimbursement toolkit which can be used by practices to claim back costs for additional work during COVID-19.

AISMA has developed the toolkit with the British Medical Association (BMA), a trade union and professional body representing more than two thirds of UK doctors. The BMA is currently promoting the toolkit to its members.

The Association of Independent Specialist Medical Accountants (AISMA) is a UK network of accountancy firms specialising in the medical sector. Deborah Wood, partner at MHA Moore and Smalley, is also vice chairman of AISMA.

She said: “MHA Moore and Smalley has a dedicated healthcare team across the North West and East Midlands advising medical businesses on a wide range of key business issues.

“We have been heavily involved with AISMA since it was established in 1995 to share knowledge within the sector and promote the benefits of quality accountancy to medical professionals.

“We’re delighted to have supported AISMA on their work with the BMA to assist medical practices across the UK at a critical time and ensure they can efficiently claim back costs for their vital, life-saving work during the COVID-19 pandemic.”

The Government is expected to provide funding to medical practices to support additional patient care to fight COVID-19, such as staying open during Bank Holidays including the Easter Weekend.

More information is expected to be released by NHS England in the coming days defining the nature of available funding. The form covers both staff and non-staff costs and provides costings based on national agreed reimbursement rates.

Deborah added: “The UK medical sector is currently under extreme pressure but practitioners are facing the added strain of continuing to run their financial functions efficiently.

“MHA Moore and Smalley is able to provide temporary support to relieve the burden and deliver some of these functions which may have previously been done in house.”

Going Electric – The Tax Benefits

As motorists, our growing demand for reduced costs and greater efficiency coupled with increased choice and performance, has resulted in a massive increase of plug in and hybrid car sales. There has been an increase in demand for ultra-low emission vehicles in the UK, with sales of electric and
hybrid cars increasing by 119% in the year to March 2020, BEVS (Pure Battery powered Electric Vehicles) however have seen an even greater rise at 204% year over year. With companies like Mercedes-Benz aiming to launch 20 new plug-in hybrid EQ Power models by the end of 2020 the market is sure to grow.

With this in mind, the government have stepped up their green initiatives, and changes to encourage the use of electric vehicles have been set out in legislation to provide a range of tax cuts which could benefit us all.

Benefits in Kind

The current system using the New European Driving Cycle (NEDC) has been replaced by the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) from 6 April 2020, where most appropriate percentages are reduced by 2 percentage points in 2020/2021 compared to the 2019/20 appropriate percentages for cars.

Related Company Car benefits

HMRC do not consider electricity to be a fuel for car fuel benefit purposes, therefore HMRC introduced a new rate from 1 September 2018 of £0.04p per mile for fully electric company cars. This is the tax-free element that can be paid by employers or claimed by employees when they use their own electric car for work purposes.

Other tax-free benefits of having an electric company car include:

  • These changes will impact Benefit in Kind (BIK) taxation going forward for the 2020/2021 tax year and switching to an electric car can bring significant tax benefits. From 6 April 2020, the BIK tax for EVs is reduced to 0% for cars registered after 6 April 2020 with a range of 130+ miles and emission of less than 50 grams per kilometre of CO2. Essentially a zero-emission
  • The cost of charging an electric vehicle at work vehicle made available to an employee will be completely tax free.
  • The cost of installing a vehicle charging point at the employee’s home The BIK will increase to 1% and 2% for years 2021/22 and 2022/23 respectively. Buyers should be aware that the EVs purchased on 5 April 2020 or before will still attract a 2% BIK even if the range is beyond 130 miles.
  • Employer pays for charge card of £100 per year to allow individuals unlimited access to local authority vehicle charging point.

Employer’s National Insurance

From 6 April 2020, as the benefit in kind charge on an electric vehicle will be 0%, the class 1A benefit in kind, which is the cost to the employer of providing benefits in kind to employees, will also be nil.

Capital Allowances

Most cars purchased by companies will be due tax relief on a writing down basis at either the main rate (18%) or the special rate (6%). However, for new and unused cars with CO2 emissions of 50 g/km or less, there is a special enhanced capital allowance of 100% available, second hand cars do not qualify for the first-year allowance. With a main rate writing down allowance, after 8 years the company will still only have relieved 80% of the cost of the vehicle, but with the enhanced capital allowance regime available to low emission cars, the full cost can be relieved in year one.

On the flip side, if the car is disposed of it may result in a high balancing charge due to the electric vehicle pool having a zero balance. It is therefore crucial you seek advice before a purchase or disposal of your electric vehicle.

Please note, that the special enhanced allowance is only available for expenditure on new and unused cars – expenditure on second hand cars does not qualify for the allowance, even if the emissions criteria are met.

VAT – The common misconceptions

There are some commonly held misconceptions about the VAT breaks for businesses buying electric and hybrid cars. There have been numerous cases of car dealers telling customers that businesses can recover the VAT on the purchase of an electric car.

HMRC have no special VAT breaks for electric cars and hybrids. The VAT can only be recovered by a VAT registered business on the purchase of the car if there is no private use at all, and that includes home-to-work journeys. So, you can only reclaim the VAT on the purchase of the car if it is for 100% business use only. If your business leases the car, then you can recover 50% of the VAT on the hire charges and all the VAT on any additional charges such as maintenance or roadside assistance.

The differences if you are self-employed

As with all things in the tax environment, when you are self employed the rules are slightly different.

The main difference is benefit in kind taxation does not exist for self-employed individuals, instead individuals can claim the costs of motoring as a tax-deductible expense. Be aware though, where a motor vehicle is used in the business and is also used privately, the costs incurred are restricted for private use. When looking at capital allowances, the rates do not change however the allowance you receive is again restricted for the private use element of the vehicle.

Using HMRC’s simplified expenses claim will mean less paperwork. Like traditional cars you can claim 45p per business mile for the first 10,000 miles per tax year. However using simplified expenses means that capital allowances and actual running costs cannot be claimed.

Should you have any queries concerning above, please contact a member of our specialist healthcare team on 01253 404404 or 0115 972 1050.

Primary Care Network (PCN) Financial Statements to 31 March 2020

It has been almost a year since PCNs were introduced to the NHS landscape and it is now time to ensure that your PCN is able to provide you with a copy of the PCN Financial Statements covering the allocation of income and expenditure for the period to 31 March 2020, and the assets and liabilities as at that date, across the member practices. This will enable the practice accounts to reflect the correct share of the income and expenditure that your PCN has received, or paid for, on behalf of your practice, together with the underlying surplus held on behalf of the practice.

It is vital that the accounting treatment of this is done in accordance with HMRC tax and accounting standards so that surpluses can be taxed and pensioned correctly. We therefore recommend that a Healthcare Specialist accountant prepares the PCN statement.

We have experience of dealing with this for a number of PCNs and would be happy to apply our wealth of knowledge regarding the unique issues of the Healthcare sector relating to tax, pension and VAT issues for PCNs, and assist with preparing your Financial Statement including liaising with any other PCN members’ accountants to acquire the necessary information.

For further information about this service, please contact a member of our healthcare team on 01253 404404 or 0115 9721050. Alternatively, please email your query to info@mooreandsmalley.co.uk and we will get back to you.

About our specialism

We have a dedicated healthcare team which consists of 30 members of staff who look after over 100 medical practices.

We are members of AISMA which is a network of independent accountancy firms throughout the UK specialising in services to the medical profession. Recently, as Board members of AISMA, we worked with the BMA in creating a reimbursement form to assist medical practices in claiming additional costs during the Covid-19 pandemic.

We have a breadth of experience working with PCNs and can provide support with a variety of areas, including:

  • Review and advice on the financial aspects of your PCN agreement
  • Advice on your PCN structure considering the long-term strategy over the 5-year contract plan
  • Prepare an annual statement of the transactions to enable the correct figures to be allocated into the member practice partnership accounts
  • Provide personal tax and pension advice in respect of the role of the PCN clinical director including assessment of the different ways the role can be paid for
  • Advice on the VAT implications of transactions across the PCN, review cost sharing group provisions and help meet HMRC requirements to ensure the PCN operates within the VAT rules
  • Advice in respect of staff employed by the PCN or hosted by a PCN member on their eligibility for access to the NHS pension scheme