• Source close to Nottingham treatment centre said doctors previously employed by Circle on an ad-hoc basis are worried about the pensions tax
  • Trust confirms the national pensions issue is influencing conversations between trust and doctors
  • NUH has not scheduled new inpatient activity for first month while it finalises staffing arrangements

The Nottingham Treatment Centre may face a shortage of medical staff as a result of some doctors’ concerns that its takeover by the NHS could have negative tax and pension implications for them.

Nottingham University Hospitals’ medical director Keith Girling told HSJ: “The medical staff working in the treatment centre have previously been from different sources: NUH staff, directly employed Circle staff and staff providing sessional work to the treatment centre [some of them who held substantive posts at NUH].”

He added: “The first two groups are continuing their work and we remain in discussion with the third group about their continued contribution to the treatment centre work.”

The trust’s preferred option is that all doctors providing care at the centre become substantive employees. Those among the “third group” who do not wish to become substantive employees of NUH face the following options:

  • They can join the NUH medical bank – where the earnings will be pensionable and they will be taxed source under PAYE, or;
  • They can provide services as an “IR35 contractor”, under which they will be liable to PAYE.

Those who are NUH substantive employees, and who wish to continue to work ad-hoc at the treatment centre, must do so under IR35. However, any substantive employee who wishes to start undertaking sessional work at the centre will not be allowed to work as a contractor.

Dr Girling acknowledged the current controversy over NHS pensions has “influenced the discussions” between the trust and doctors previously providing sessional work at the treatment centre. 

An anonymous source close to the treatment centre told HSJ just under half of the activity previously done at the treatment centre, which was run by private healthcare provider Circle for 11 years, was done ad-hoc by doctors employed through individual limited liability partnerships.

Nottingham University Hospitals took over services at the centre from Circle on 29 July after winning a bitterly contested procurement.

The source said the ad-hoc work done by doctors at the treatment centre included a lot of surgery and anaesthetics.

“[The trust] are struggling because nearly all doctors employed through a LLP are refusing to [work] for NUH,” they said. They added that the doctors did not want to be treated as NHS employees and taxed through PAYE or to incur “a large tax charge on their pensions input.”

“Doctors can go up the road to Spire, Ramsey or BMI and still have money paid into private practice, if they stay at the treatment centre they will have tax implications,” they said. 

However, Dr Girling told HSJ the trust had arrangements in place for 50 per cent of this group – which HSJ understands includes at least 90 doctors. It has also secured some substantive appointments to deliver work previously carried out by sessional medical staff.

Earlier this week, the government proposed to allow senior clinicians to set their own pension contributions along a review of how tax rules are impacting the NHS, in order to prevent doctors refusing extra work. 

Transitional arrangements

An internal email seen by HSJ and sent from NUH to doctors providing services at the treatment centre on an ad-hoc basis, confirmed transition arrangements for the next three months.

It said pay rates for consultants would be £550 per four-hour session and for post CCT-fellows £412.50 per four-hour session.

It also confirmed consultants wishing to trade under an LLP would fall within IR35 tax rules. This would mean they would be subject to tax under PAYE. 

“This letter is our confirmation to you that you will be taxed in accordance with the principles of IR35,” it said. “You have the right to appeal within 30 days of this notification.”

The email said that substantive staff not already operating through an LLP would not be able to trade with the treatment centre in that way.

No new inpatient activity

The source added that there was “little recognition” that NUH would not have an adequate supply of doctors to carry out ‘cold’ elective work.

“This is why there is no inpatient work going on [in the treatment centre],” they said.

In response, Dr Girling said: “As a temporary arrangement we have agreed for the first month of the contract no new inpatient activity will be scheduled in the 16-bedded overnight short stay unit as we embed the services and finalise the staffing arrangements for the delivery of the new contract.”

“This will not impact on patients receiving timely care and treatment in line with national requirements,” Dr Girling said. “We will review this arrangement later in the month with our commissioners.”

He added that most specialities were already running outpatient clinics in the treatment centre under the new contract.

The facility, which the Care Quality Commission described as the “largest independent treatment centre in Europe” in 2015, previously employed 700 staff and treats around 250,000 patients annually.

On 29 July, NUH transferred 536 staff through the TUPE process to the trust who were previously employed by Circle.

HSJ reported earlier this year that NUH expected to only provide limited capacity in the first few weeks of the contract for services such as cancer care.

When approached by HSJ a Circle spokesman said the organisation hoped that high-quality care would continue under NUH.

“The commissioners ran multiple flawed procurements which finally resulted in the award of the contract to NUH. They spent four months remarking the bids after we raised concerns and this delayed the whole handover process,” he said.

“We have repeatedly offered to carry on services for a short period of time to aid the transition. The commissioners have repeatedly declined our offer,” the spokesman added.

A spokesman for the NHS clinical commissioning groups in Nottingham and Nottinghamshire said the treatment centre contact award was delayed due to a legal challenge issued by Circle, which determined the “much shortened timescale for mobilisation”

“Despite these constraints, teams across NUH, the CCG and Circle have been working hard to ensure that there is a safe transfer of services between Circle and NUH,” he said.

Update: Story amended at 14:15 on 9 August to reflect the CCG’s response.

Nottingham treatment centre – the story so far

March 2018: Circle pulled out of a bid to continue running the treatment centre, started legal action and criticised Rushcliffe clinical commissioning group’s tender process.

May 2018: Commissioners delayed the procurement of the treatment centre for a year.

May 2019: High Court documents revealed Circle was to challenge Rushcliffe CCG’s decision to award the treatment centre contract to Nottingham University Hospitals. Circle questioned the trust’s finances and said savings proposals were “not credible”.

June 2019: HSJ revealed patients would see treatment delayed by Circle’s exit from the treatment centre.

29 July 2019: NUH took over the treatment centre and 536 staff were TUPEd over.