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UCL Policy on Private Practice for Personal Gain (PPPG)
Effective from 1st August 2005
UCL has amended its policy on private practice for personal gain to reflect changes resulting from the New Clinical Academic Consultant Contract. From August 2005 private practice payments via the UCL payroll will cease and new arrangements will apply, as set out in this document.
UCL and NHS commitments must take precedence over private practice. A full time clinical academic is contracted to work 10 programmed activities (PAs). In order to be eligible to profit from undertaking private practice, a clinical academic is required to offer to undertake an additional PA (clinical or academic). However, where the proceeds are retained by - or used to benefit - UCL there should be no expectation that the clinical academic undertakes an additional programmed activity (APA) in order to qualify for pay progression.
Under the previous private practice policy the University of London allowed clinical academics some personal benefits. From August 2005 this no longer applies. Where, for example, clinical academics previously surrendered 10% of salary in order to benefit from unlimited private practice, this will no longer be required from August 2005.
In consideration of UCL's obligations under the Working Time Regulations clinical academics are advised that they should only engage in private practice where to do so they do not exceed a 48 hour week (averaged over a 17 week period). Compliance with Working Time Regulations requires, on grounds of health and safety, for a break during the working day, rest after each working day and a period of continuous rest weekly. For further details please refer to the UCL HR website: http://www.ucl.ac.uk/hr/docs/working_time_regs.php
In 'A code of Conduct for Private Practice' DoH 'private practice' includes:
a) the diagnosis or treatment of patients by private arrangement (excluding fee paying services described in Schedule 10 of the Terms and Conditions)
b) work in the general medical, dental or ophthalmic services under Part II of the NHS Act 1977.
UCL defines PPPG as 'non-NHS clinical work involving diagnosis or treatment of patients which generates payment to the clinical academic. The clinical academic is acting entirely in a private capacity with no legal link or liability to UCL. The clinical academic will be responsible for his/her own insurance and professional indemnity and/or medical defence cover.'
Private practice is not the same as 'Private Consultancy'. Consultancy is the provision of remunerated services to external organisations in the form of expert advice or assistance. Further guidance is available at: http://www.ucl.ac.uk/finance/finance_docs/raguide_consult.htm
Clinical academics with honorary clinical contracts are permitted to undertake PPPG provided they comply with the terms laid down by UCL. These terms are as follows:
Clinical academics should inform UCL of their private practice commitments. Information should be disclosed at least annually as part of the job planning and/or appraisal process. This information will include the planned location, timing and broad type of work involved. Clinical academics should inform their Head of Department in advance of any significant changes to their private practice arrangements.
3) Use of UCL Facilities
The clinical academic must not do anything that might lead the patient to believe that the clinical academic is acting in his/her capacity as a UCL employee (e.g. by using UCL headed notepaper, UCL email address etc). The clinical academic may state that s/he is employed by UCL, since this is a simple matter of fact.
In the course of carrying out private practice, a clinical academic may only use UCL staff resources (e.g. provision of administrative support such as invoicing or accounting of fees, or use of research , technical or clerical staff acting in a UCL capacity and during UCL normal working hours) equipment or facilities, with explicit prior consent from the UCL Head of Department. There will be a normal expectation that a payment is made to UCL for the use of such services. Such payments must be agreed in advance with the Head of Department and will be determined by the Head of Department at a rate that s/he considers reasonable. Heads of Department may wish to adopt the generic procedures followed in UCL Consultancy (see Appendix 1).
Furthermore, clinical academics may only see patients privately within UCL facilities with explicit agreement from their UCL Head of Department. Agreement may be granted where it can be shown that:
The work delivers benefits to UCL's primary purpose activities e.g. teaching and/or research
The work promotes the reputation of UCL as a place of education and research.
When undertaking PPPG the clinical academic must have a Disclaimer of Liability Letter. Details available at http://www.ucl.ac.uk/finance/finance_docs/disclaim_consult.pdf signed between him/her and the patient. This documents that the patient acknowledges the clinical academic is acting in an individual capacity, which is in no way connected or associated with UCL, thereby releasing UCL from all responsibilities and/or liabilities for the services rendered. A copy of this signed letter should be kept on record by the clinical academic undertaking PPPG.
4) Income from Private Practice
The clinical academic is responsible for the invoicing and collection of payments arising from private practice. UCL headed stationery must not be used and the payments must not be paid directly into any UCL accounts. A clinical academic can, however, make a charitable donation to UCL under 'gift aid' arrangements which will be credited to a departmental donation account to be reinvested in the Department to support teaching or research activity. It will be necessary for the Development and Corporate Communications Office to be informed of any such gift aid donations, together with details of the UCL account code which has been credited, in order that income tax can be claimed and credited accordingly.
From August 2005 private practice payments via the UCL payroll will cease.
It is the clinical academic's responsibility to account for any income tax, national insurance, VAT or any other taxes due to the appropriate tax authorities on amounts earned from private practice.
5) Gift Aid
Payments received by a clinical academic from a patient for private practice must not be paid directly into any UCL account. (It is acceptable to UCL for an NHS Trust, acting as an agent, to collect private practice fees and pay those to UCL.)
Where a clinical academic wishes to use some or all of his/her private practice income for supporting Departmental activities, the tax-efficient way of doing so under current tax rules, to avoid paying tax on such income, is as follows. Having banked the gross fee into a personal bank account, a charitable donation to UCL under gift aid can be made for the amount required and this will be credited to a specified departmental donation account. It will be necessary for the clinical academic to declare both the gross income and the gift aid when completing their next personal tax return. The income subject to tax will be reduced by the gross amount of the gift aid, providing that no direct personal benefit (financial or in kind) accrues to the clinical academic from UCL's use of the donation. Once the income is donated to UCL it will be subject to UCL's financial regulations and the requirements that all expenditure meets UCL's charitable objectives. Please see Appendix 2 for further details and examples of the Gift Aid process.
Appendix 2: Gift Aid to UCL
A donation by an individual to UCL is worth about 28p in the £1 more to UCL if it is made by Gift Aid. For a donation to qualify as a Gift Aid payment the donor must be UK resident and must not obtain any benefit from making the donation. If the donation is to be credited to a UCL discretionary account code held in the name of the donor, this will not be an eligible gift aid donation, it is best to place donations in a general departmental donation account. The donor must complete a Gift Aid declaration which is obtainable from the Development & Corporate Communications Office's website:
select gift form for UK Residents.
Example of how Gift Aid works
In practice Gift Aid works in the following way:
Say a clinical academic receives £1,000 for private practice work and wishes to gift this money to UCL. He/she would make a payment to UCL of £780. At the basic rate of income tax of 22%, this represents a gross amount to UCL of £1,000 as UCL can claim back the tax withheld of £220 from the Inland Revenue.
Assuming the clinical academic is a higher rate tax payer, he/she is due higher rate tax relief on their Gift Aid donation of £180, (the difference between tax on £1,000 at 40% and 22%).
He/she would disclose on their tax return the gross income of £1,000 and a donation under gift aid of £780 (net of tax). The tax due on their income would be £1,000 x 40% = £400. However,additional relief of £180 is offset against this £400 leaving just £220 due, ie the basic rate tax relief withheld at the time of making the gift.
The net effect of this is that the clinical academic receives £1,000 and pays out £1,000, - £780 to UCL and £220 to the Inland Revenue - and UCL receives £1,000 - £780 from the clinical academic and £220 claimed from the Inland Revenue.
Where clinical academics wish to follow the above procedures, a completed Gift Aid Declaration form and cheque made payable to 'UCL Development Fund' should be sent to the Development Office with a note of the account code to which the income and tax refund should be credited. The Development Office make claims to the Inland Revenue at regular intervals for the tax refunds on donations received.