GP premises reimbursement plays a crucial role in ensuring that GP practices are financially supported in relation to the costs of owning, leasing, or borrowing premises. This section outlines the various reimbursement schemes available to GP practices based on the ownership or rental status of their premises. Whether a GP practice owns the building, rents from a private landlord, or is paying off a mortgage, each scenario has specific reimbursement rules and procedures. Understanding these different types of reimbursements is essential for practices to effectively manage their financial obligations and ensure they are receiving the appropriate level of support from the NHS.
Notional Rent Reimbursement
- When the GP owns the building:
- Reimbursement for notional rent is determined by the Current Market Rent (CMR), which is calculated based on the terms of a hypothetical lease agreement. This assumes a 15-year lease where the tenant is responsible for internal repairs and the landlord is responsible for external and structural repairs, including insurance costs associated with these responsibilities.
- The CMR must be reviewed at least every 3 years to ensure it reflects current market conditions and the terms of the lease.
Borrowing Cost Reimbursement (formerly known as Cost Rent)
- When the GP is paying off a mortgage on the premises:
- Reimbursement for borrowing costs is applicable only when the GP is financing the premises via a mortgage. The practice must notify NHS England of any changes to the borrowing arrangements, as failure to do so could lead to the clawback of overpayments.
- While repaying the loan, the practice is required to make capital and interest payments. Failure to pay down the capital of the loan as required may result in sanctions imposed by NHS England.
Leasehold Cost Reimbursement
- When the GP rents from a private landlord:
- The reimbursement level for leasehold costs is based on the Current Market Rent (CMR) or the actual lease rent, whichever is lower.
- An independent District Valuer is responsible for assessing the CMR to ensure an accurate and fair valuation.
- Rent reimbursement is subject to review whenever the landlord conducts a rent review, unless the review results in no change to the rent being charged. In such cases, the reimbursement may not require adjustment.
These reimbursement schemes are designed to ensure fairness in the financial arrangements between GP practices and the NHS, whether the practice owns the premises, pays off a mortgage, or rents from a private landlord. Regular reviews and adherence to guidelines are crucial to maintaining accurate and up-to-date reimbursements.
Important Links
Landlord and Tenant Act 1985
https://www.legislation.gov.uk/ukpga/1985/70/contents
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