Pensions’ red tape confusing doctors
By Edie Bourne
Independent practitioners who are asking the Government to pay large tax bills caused by breaching annual pension savings limits in 2019-20 are being advised to ensure they apply for ‘Scheme Pays’ before the deadline as well as completing the other criteria.
The Government announced in the winter of 2019 that it would cover clinicians’ tax charges for one year only to ease the workforce crisis in the health care system at the time.
Doctors would be compensated by the NHS upon their retirement in a legally binding agreement.
But financial advisers have told Independent Practitioner Today that doctors are confused over how to claim the tax rebate.
They are notifying doctors that to make the claim against ‘annual allowance’ charges, they must ensure they have applied for Scheme Pays before the 31 July deadline this year.
And they also need to formally apply for the compensation scheme. Both applications use different forms and require full calculations.
Patrick Convey, technical director at specialist financial planners Cavendish Medical, explained: ‘This tax charge repayment scheme was an unprecedented yet welcome move by the Government. Many of our clients are pleased to have their tax charges covered, even if for just one year, but, as with everything concerning NHS Pensions, there are no easy options.
‘You must ensure you have the correct annual allowance figures before starting your claim and then ensure you follow the correct procedure for the applications. In many cases, you will need to have your Scheme Pays application signed off by your NHS employers too.
‘Many doctors will have faced their toughest working challenges in the last year and may not have the time to tackle difficult calculations. We would urge all eligible clinicians to seek expert help to ensure they are in possession of the right figures and follow the correct procedure.’
The outcome of the consultation into the 2015 NHS Pension Scheme age discrimination remedy has not yet been confirmed, but is expected to be announced in the next few months.
Mr Convey continued: ‘It is imperative doctors do not wait to consider the outcome of this consultation before applying for Scheme Pays – even if they believe their 2019-20 tax charge will be removed. Better to submit the applications needed in time and correct any calculations later if necessary.’
The compensation policy applications deadline is March 2022.