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New to Partnership Payment

on Tuesday, 24 March 2020.

As of 1 April 2020, first time partners will be offered a guaranteed one-off payment of up to £20,000 and £3,000 of business training allowance to support them as a new partner.

The new scheme is designed to attract GPs and other professionals in general practice into partnership.

How Would It Work?

The details of the schemes are yet to be released, however the 'Update to the GP contract agreement 2020/21 - 23/24' states that the payment will initially be a loan that will be converted into permanent payment within a certain number of years' service as a partner. The practice will be able to claim the reimbursement from NHSE along with others costs, such as business training costs. It is envisaged that the practice will need to give assurance to NHSE that a pro-rata payment will be paid to the partner. The scheme will be available to those who have not been partners before and other professional groups (e.g. nurse and pharmacists).

The Partnership Agreement

Practices should ensure that they take steps to update their partnership agreement, especially if a new partner joins under the scheme. New partners who want to take advantage of the new scheme should also consider the terms of the partnership agreement. Usually the main concern for new partners is the personal risk that they are expected to take on when joining a practice e.g. buying into premises or contributing to the capital of the partnership. The one-off payment may go some way to offsetting that risk, but not in its entirety. Additionally, new partners should consider their entitlements as a partner (e.g. maternity, paternity, adoption leave and sick leave), as these may differ from their entitlements as an employee. As partners are self-employed, they do not have the employment rights and responsibilities of employees. An offer of partnership will need to be carefully considered and the partnership agreement will need to updated to reflect the terms agreed.

Our Five Top Tips

With the above in mind, we have listed five top tips to consider when reviewing your partnership agreement.

1. Is your partnership agreement up to date?

A new partner will want to know how the partnership currently operates and will therefore want to the review the partnership agreement before joining. It's a good idea ensure that the terms that bind your partnership accurately reflect how you operate.

2. Ensure that your deed covers the New to Partnership Payment.

The details regarding to the scheme are due to be published on the 1 April 2020 and we do not yet know how this will operate. If the payment is a loan, which is no longer repayable after a certain period of time, the partnership may need a mechanism to claw it back from a partner who has left.

3. Are the terms of your partnership agreement acceptable to the current partners and new partners?

Taking on a new partner is a good opportunity to revisit the terms of your partnership agreement. If your partnership agreement has not been updated in a while, you may want to consider bringing your deed up to date to reflect the most recent changes, for example, the changes to medical indemnity insurance and the introduction of PCNs.

4. Take steps to add the new partner to your partnership agreement before they join.

If a new partner joins you will need to update your partnership agreement to include the new partner, even if they are subject to a probationary period. If a partner joins without entering into a partnership agreement or a deed of adherence, the partnership may be operating as a partnership at will.  

5. A partnership without an agreement is as a partnership at will.

This is a very risky situation to be in as a partnership at will can be dissolved at any time by any partner, merely by giving the others notice. On dissolution, the staff become entitled to redundancy payments, any practice loan can be called in, and technically the PMS or GMS contract is at risk of termination. Under a partnership at will there is no right to expel, so if any disputes arise, the partners can find themselves trapped in an unhappy partnership with a misbehaving partner.  

Coronavirus Legal Advice


If you are a GP and you have any queries about how your practice could benefit from the new partnership payment, please contact a member of our Healthcare team, or complete the below form.

 

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