Is your practice premises an untapped source of revenue? Paul Conlan, Operations Director of GP Surveyors offers some advice on how your building could help you boost income.
Is your practice making the most of your premises? Many practices simply see their building as a place from which to provide their NHS services, but good use of your surgery space could help you generate extra income.
Here are four tips to help you:
1. Check your rent reimbursement
One of the simplest ways for practices that own their building to increase the revenue it delivers is to have a specialist surveyor check the NHS rent reimbursement. Remember your rent reimbursement is only the district valuer’s opinion of the appropriate rent and practices have a right to check whether this is fair and reasonable estimate. In 2016 around seven out of every 10 rent reimbursements we checked generated an increase for the practice.
2. Have you got space for a pharmacy?
Assuming that it is possible, implanting a pharmacy in your building can generate substantial income. These implantation deals can be structured in different ways and it is important to have appropriate specialist advice to ensure that the deal is market value and that any incentive included in deal is not outweighed by tax and loss in capital value (example of incentives include build costs and/or a rent in advance payment).
3. Can you generate more rent from an existing tenant?
If you have an existing pharmacy or another occupier under a lease (for example a dentist, physiotherapist or NHS services) then it may be possible to generate extra income by reviewing the rent or renewing the lease when it ends.
4. Is it worth introducing new service providers if you have space?
Introducing complementary service providers into your building is not as lucrative as might first be thought, due to changes within the Premises Cost Directions 2013. The directions allow NHS England to equitably offset income against the rent reimbursement if the complementary service is provided from rooms that are used for contracted medical services at other times. If you do have space that you want to rent out, it will be most profitable for the practice if you rent out rooms that do not currently qualify for or attract NHS rental reimbursement.
Paul Conlan is operations director, GP Surveyors a chartered surveyors specialising in GP surgeries.