In recent years many NHS staff have been affected by pensions tax rules and in particular, the Annual Allowance. This has had an impact on staff who want to help their patients by working additional hours.
As a result of the impact that pensions tax rules were having on frontline services NHS England & NHS Improvement (“NHSE&I”) introduced this Policy to help combat the problem. This policy re-imburses the amount of tax the scheme has paid on retirement of the clinician.
Clinicians who are members of the NHS Pension Scheme (“NHSPS”) and face an Annual Allowance charge in respect of the 2019/20 tax year will be able to have this charge paid by the NHSPS (by completing and returning a scheme pays election) meaning that they don’t have to worry about paying the charge now out of their own pocket. The deadline for submitting this form if you want to take advantage of this scheme is 31/7/21.
However, because of the pandemic, the voluntary Scheme Pays Election (SPE) deadline has been moved to 31/3/22. As the election is voluntary, the total charge could be subject to late payment interest from HMRC. We would recommend, if possible, that the forms are submitted by 31/7/21 as the form can be amended within four years.
For 2019/20 the NHS employer has made a contractually binding commitment to pay the corresponding amount to NHSPS, ensuring that you are fully compensated when you come to take your pension.
To benefit from this policy you must fill in a compensation form after the SPE form has been submitted. The deadline for this is 31st March 2022 but GPs currently have a window between 2nd August 2021 - 1st October 2021 to file theirs with the PCSE for approval, so their SPE needs to be in place by then.
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