gp finance update – changes for 2008/09 jenny stone, aca ramsay brown and partners ramsay house 18...
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![Page 1: GP Finance Update – Changes for 2008/09 Jenny Stone, ACA Ramsay Brown and Partners Ramsay House 18 Vera Avenue London N21 1RB Tel: 020 8370 7705 E-mail:](https://reader035.vdocuments.us/reader035/viewer/2022080916/56649eb35503460f94bba2d1/html5/thumbnails/1.jpg)
GP Finance Update – Changes for 2008/09
Jenny Stone, ACARamsay Brown and Partners
Ramsay House18 Vera Avenue
LondonN21 1RB
Tel: 020 8370 7705E-mail: [email protected]
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Minimum Practice Income Guarantee (MPIG)
DDRB announce global sum payments to increase by 2.7% to £56.20
Any increase in global sum will simply reduce the correction payments
Practices with MPIG will therefore not see an increase in core practice funding
Future of MPIG What does this mean for PMS practices…..
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MPIG ExamplePresent Position
After Pay Increase
Practice A
Global Sum 100,000 102,700MPIG 150,000 150,000Correction Factor 50,000 47,300
No Increase in funding
Practice B
Global Sum 100,000 102,700MPIG 101,000 101,000Correction Factor 1,000 0
Increase of 1.68%
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Extended Hours
Access DES & choice & booking will be replaced with extended hours DES (equivalent to £2.95 per patient)
58.5 QOF points allocated to extended hours Extended hrs DES £2.95 per patient If don’t do extended hours will lose income However, need to consider costs of offering
extended hours e.g. staff costs, costs of keeping surgery open for longer
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Changes to Capital Gains Tax
Major reform from 6th April 2008 Capital gains taxed at a rate of 18% Indexation and taper relief which would reduce a
capital gain abolished Introduction of entrepreneurs relief for business
assets if individual ceasing trade Entrepreneurs relief will mean business assets
effectively taxed at 10% Entrepreneurs relief can be claimed on more than on
occasion up to a lifetime limit of £1m.
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Capital Gains Example
Assumptions
Disposal before 05.04.08
Disposal after 06.04.08
Surgery Cost £150,000 in March 82Surgery now valued at £600,000
Capital Gains TaxSale Proceeds 600,000 600,000Cost (150,000) (150,000)Indexation Allowance (157,050) -Gain after indexation 292,950 450,000Taper relief - Business (219,713) -Entreprenurs Relief (4/9th) - (200,000)
73,237 250,000Annual Exemption (9,600) (9,600)
63,637 240,400
Capital Gains Tax - 40% / 18% 25,455 43,272
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Tax Relief on Capital Expenditure
Purchase of fixture, fittings and equipment qualify for capital allowances
Capital Allowances prior to 6th April 08 • First Year allowance of 50%• Thereafter writing down allowance - 25%
Capital Allowances from 6th April 08• 100% of cost up to annual Investment limit of
£50,000• Writing down allowance – 20%• Cars over £12,000 maximum £3,000
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Taxation of Non-Domiciled Individuals
Prior to 5th April 08• Individuals who are UK resident, but not
domiciled in UK, declare overseas income on basis of remittance
From 6th April 08• Non-Dom individual has been resident in UK for
7 yrs out of past 10 yrs• Declare all overseas income & gains on arising
basis• If want to use remittance basis would have tax
charge of £30,000• De minimis limit of £1,000
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Tax Return Deadlines 08/09
Deadline for paper tax returns bought forward to 31st October 2008
Tax returns filed online deadline remains 31st January 2009
Automatic £100 deadline if late Can appeal against penalty of individual if
tax paid by 31st January
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Superannuation Contributions for 08/09
Employee contributions increased from 6%
Rate of 08/09 based on 06/07 earnings Employer’s rate still 14% Earnings Cap removed for employees cont’b Earnings cap still applies to GPs have added yrs contracts
prior to April 08 and were previously capped
Annual Income
Current Contribution Rate
New Contribution Rate
Up to £19,165 6% 5%
£19,166 to £63,416 6% 6.5%
£63,417 to £99,999 6% 7.5%
Over £100,000 6% 8.5%
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QUESTIONS?