- Posted Monday January 14, 2019
The start of a new year always provides a chance to take a fresh look at what's going on around us and plan for the year ahead. With us in the busiest time of year for GPs, principals and practice managers though, you may not have as much planning time as you’d like.
Nevertheless, there are a few key things in finance that everyone in primary care should be thinking about as 2019 gets underway, the first of which will kick in at the start of April.
The ‘Making Tax Digital’ initiative
The arrival of government's flagship Making Tax Digital (MTD) initiative will make it compulsory for all firms with an annual turnover above £85,000 to keep and file their VAT records digitally.
Generally speaking, these businesses will need to keep digital records of invoices, receipts and other documentation, as well as being required to use systems that allow for information to be sent digitally to HMRC on a quarterly basis.
There are, however, exemptions to the scheme when it comes to the medical sector, as the provision of medical services is often VAT-exempt, and many GPs and locums simply aren’t VAT-registered.
In terms of primary care practices, it will only be compulsory for dispensing practices with the requisite turnover that are already VAT-registered to comply with the new digital regime from this start date, while providers of medico/legal services and aesthetic procedures such as botox injections are also likely to have to comply.
For GP practices that do need to comply, monies relating to patient list-based income should be fairly straightforward to manage, but the arrival time of income from the provision of local and national enhanced services may be somewhat less predictable, which will impact on the reporting that the new system requires you to do.
Preparing for the start of the new financial year
There's also the question of when your individual practice's financial year end is, as you’ll still be required to complete the usual year-end tax return as well as the new quarterly ones.
Practices need to identify the software system that they're going to adopt to comply with MTD requirements as early as possible in the quarter, or at the very least be talking to their accountants about it, and be planning for how their ways of working might need to evolve as a result.
As an aside to this, there’s no reason to think that the digital reporting requirement won’t be extended in the future, so even if your practice isn’t affected this time around, it makes sense to use MTD as a reason for checking whether its electronic book-keeping systems are ‘fit for the future’ or whether your operations could benefit from an upgrade.
Being prepared for QOF deadlines
The run-up to April is going to be busier than ever, as alongside the arrival of MTD, there's the annual QOF deadline to consider. Just as we're often told to shop early for Christmas, QOFing early for Easter would be a very good idea this year!
Rather than leaving it to tick all the boxes you can in the last two weeks of March, commit practice resources to the process from January onwards, so that when the deadline inevitably looms, you can make much more orderly progress towards it.
Looking further ahead through the whole year, time spent with your professional advisors reviewing where the pinch points and key moments can be expected to occur during 2019, how you managed them last year and what you might do better or differently this time around is never wasted.
The elephant in the room of course remains Brexit, which could have an extremely significant but as-yet unquantifiable impact on the healthcare sector. However, if you've done all you can to prepare a practice plan for the year, you should be less susceptible to any nasty surprises that may come our way.
Richard Humphreys is director at RMT Healthcare, the specialist medical division of RMT Accountants & Business Advisors.
RMT provides the full range of financial and business advisory services and works with firms of all sizes both within and outside the North East. For further information on RMT Accountants & Business Advisors, please visit www.r-m-t.co.uk.