Messages for practices in leased premises – making claims for leased rent reimbursement

1.Practices in leased premises who are VAT Registered and recover VAT on premises rent charges

This is a reminder to all practices in leased premises of the requirement under Paragraph 51 of the “The National Health Service (General Medical Services - Premises Costs) Directions 2013” to declare any information which the Board would require in order to calculate an appropriate level of rent reimbursement.

If you recover VAT on activities including the partial/full recovery of VAT on your leased premises and are claiming a VAT refund, please could you make this clear when completing and submitting your rent reimbursement claim form, so the correct reimbursement of actual incurred costs is made.

You may be a dispensing practice and recover VAT on the dispensing area of your premises, which NHS England needs to know in determining and making the correct reimbursement of premises costs duly incurred by the practice.

Please can you email with a self-declaration confirming whether you are VAT registered or not and whether you “do” claim VAT refunds on the landlord rent where it is charged?

2.Clarification of entitlement under Premises Costs Directions for claiming approved Current Market Rent (CMR) for practices in leased premises

NHS England Current Market rent (confirmed in CMR6 letter following District Valuer assessment of rent review) is the maximum NHS England will pay. The finance team operates a claims process and you should submit timely claims to:

There are differences in what you may claim and this is dependent upon the type of lease you have and the responsibilities you as a tenant have under the lease terms. There are two scenarios:

  • Practices in leased premises responsible for Tenant Internal Repairing (TIR)

Landlord rent = CMR confirmed in CMR6 letter which is fully passed through and paid to Landlord by the practice.

For Tenant Internal Repairing Lease: The landlord rent is set and includes allowances and costs to the landlordfor external repairs, maintenance and insurance

Your claim needs a copy of the landlord invoice and our finance team will validate this to the CMR6 value held on file before paying the claim

  • Practices in leased premises responsible Full Repairing and Insuring (FRI)

This advice is to ensure that your claim for reimbursement of lease rent accurately reflects landlord rent invoice plus the allowance approved by the District Valuer to cover your practice responsibilities under a Full Repairing and Insuring (FRI) Lease.

For Full Repairing and Insuring Lease:This is where you as the tenant are fully responsible for internal and external maintenance and insuring of the premises: Landlord rent + FRI allowance = CMR, so Landlord rent is passed through and paid to landlord, and FRI allowance is retained by practice and saved to manage costs for external repairing and insurance of the building.

When submitting your claim for rent reimbursements please ensure the form makes it clear you are claiming:

a)The value of the landlord rent (copy of landlord invoice enclosed)

b)The value of the approved FRI allowance

c)The total approved amount claimed to value in NHS England CMR6 Determination Letter (enclosed)

Your claim needs to include the landlord invoice and CMR6 letter showing the build up to the total claim. Our finance team will validate this to the CMR6 value held on file before paying the claim, and only reimburse landlord rent unless backed up by copy of the CMR6 and FRI allowance is detailed in the claim.