ICAEW Healthcare Conference 2024: What Medical professionals need to know

Earlier in the year, I attended the annual ICAEW (Institute of Chartered Accountants in England and Wales) Healthcare Conference. The event was packed with updates about the latest developments in healthcare, taxation, pensions and more. Here’s a round-up of the key tax points that are useful to medical professionals. We’ll cover pensions and PCSE updates in more detail in separate blog posts.

IR35 legislation

The new IR35 legislation, effective from 6 April 2024, was a significant focus. Key points included:

• Contractor status determination – a reminder: End-user businesses are responsible for determining a contractor's working status. If HMRC deem a contractor has been incorrectly classified outside IR35, the contractor could face penalties, including being charged employer and employee National Insurance contributions (NICs).

• Tax offsetting: Where a contractor has been deemed to fall within IR35, there is an argument that the income is effectively double taxed as they will be charged tax, employer and employee National Insurance contributions. However, they will have declared and paid tax on the gross earnings before deductions rather than the lower ‘taxable pay’ figure which an employee would pay tax on. HMRC have now agreed to offset against any determination taxes already paid, although employer NICs cannot be offset. The Personal Services Company (PSC) can, however, claim a refund.

• Locum work: Extra sessions as a locum, when the contractor is usually salaried, are often caught inside IR35 unless their working arrangements differ significantly. This is a common query but one worth double checking. Check your status here.

Basis Period Reform

The 2023/24 year is a transitional period for the Basis Period Reform, with income tax levied on profits earned in a tax year (opposed to the accounting year falling within the tax year) from 2024/25. Key points:

• Year-end changes: Many clients have changed their year ends in 2023/24 to streamline the process and access tax charge spreading over five years.
• Overlap relief: Provisional figures can be used to ensure timely tax return filing, with amendments allowed later. See HMRC link here.
• Impact on pensions and student loans: The reforms affect pension growth, annual allowance and student loan repayments but not high-income Child Benefit charges or tapering for annual allowance purposes.
• Accelerated charge option: There is an option to elect to accelerate the additional charge, which must be included in the tax return within one year of the filing date.
• Different spreading method: A case is being put forward to HMRC to consider a different method of spreading for pension purposes than for tax purposes.

For more information, please read our Medical newsletter here or refer to the Government website here.

McCloud Remedy and NHS Pensions

The McCloud Remedy was a central topic, with important updates on the rectification of age discrimination in public service pension schemes. Key points included:

• Legacy scheme rollback: Reminder that any pensionable service that affected members had between 1 April 2015 and 31 March 2022 is being placed back into their legacy scheme and, thereafter, existing members would be moved to the 2015 scheme, with choices upon retirement on how their service is treated for the 2015-2022 years.
• Compensation: Potential compensation for annual allowance or lifetime allowance charges and unauthorised payment charges.
• Pension adjustments: Revised pension growth figures must be requested by accountants via a new subject access request.
• Client portal: The client portal will show the timescale for pension statements to be made available; prioritising those who’ve already retired.
• Scheme Pays elections deadline: The deadline for Scheme Pays elections for the 2022/23 year is theoretically 1 July 2024. However, revised Annual Allowance Pensions Savings Statements are not expected until October 2024. It was recommended to handle any annual allowance charges arising for the 2022/23 year via the PCSE portal at a later date and not to worry about submitting anything before 31 July 2024 as it would only be a rough guess.

For more information, please refer to our previous insights:

• NHS Pension members – McCloud Remedy
• NHS pension scheme tax charges for GPs
• Impact of McCloud judgement

PCN limited companies

Recommendation for shareholders agreement and certain schedules to be drawn up if a PCN limited company holds the GMS contract, to supplement the existing Network Agreement.

As a PCN limited company holds the staff only, this doesn’t trigger a CQC registration.

GP earnings

GPs are voicing dissatisfaction as the real-time income for contractor GPs has fallen by 23%, compared to increases for non-GP staff (5.7%), employed GPs (6%) and GP locums (9%), with an April 2024 contract uplift of just 1.9%. The BMA is in dispute with the Government regarding GP pay rates.

Publication of GP earnings for higher earners continues to be unpopular with minimal disclosures made and no summary seen published anywhere.

Need help?

If you’d like to discuss any of the above further, please get in touch with our Medical accounting team. Call 0330 024 0888 or email enquiry@larking-gowen.co.uk.

Emma Wood