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GPs could be hit with unfair NHS Pension tax liabilities running into thousands

  • 26th May 2015

GPs could be hit with unfair NHS Pension tax liabilities running into thousands

The head of a specialist medical accountancy firm has spoken of his frustration with the NHS Pension Scheme which is basing critical decisions affecting GPs tax liabilities on estimates rather than readily available actual figures.

Keith Taylor, managing director of BW Medical Accountants, has spoken out after one of the firm’s GP clients had their NHS Pension tax liability assessment (called an Annual Allowance Scheme Pays Election Notice) rejected.

“The system is a shambles!  It is possible that individual GPs could be saddled with significant tax liabilities running to many thousands of pounds with no recourse, as NHS Pensions refuse to accept tax liabilities that do not agree with their flawed system.

“To have an assessment rejected because it’s based on accurate figures and not the NHS Pension Authority’s erroneous estimate is just a waste of everybody’s time.”

The NHS Pension Scheme can pay some or all of an individual’s Annual Allowance tax charge, a tax for which GPs are potentially liable as a result of the annual increase in their NHS pension benefits.  The problem arises as the NHS Pension Authority is basing its decisions on estimates derived from the previous year’s income which could be completely different from actual income if, for example, a GP has substantially increased their working commitments and thus increased their annual earnings.

“The most ridiculous part of this is that GPs have to annually submit to their local NHS authority something called certified superannuable earnings, an accurate figure of actual GP earnings. Yet instead of using these figures which must be readily available to the NHS Pension Scheme, they persist in issuing earnings estimates which are wrong.

“This takes us back to last autumn when the NHS Pension Scheme sent out hundreds of incorrect estimated Annual Allowance statements to GPs for 2013/14 as these too were based upon estimated earnings and warned GPs that they needed to take action. 

“This situation is causing an awful lot of unnecessary anxiety as the deadline to submit the 2013/14 Annual Allowance Scheme Pays Election is 31 July this year.

“I’m sure the NHS Pension Scheme wants this situation sorting as quickly as we do and we are currently corresponding with them to agree a sensible working solution going forwards.”

Who writes this?

Rachael Mackay

Rachael Mackay

Head of Marketing & Business Development
Find out more about Rachael
  • Very smooth changeover to BW, with good communication at all times. Very efficient in the production of the accounts (as promised) and the Partners are delighted with the advice received to date.

    Practice Manager
  • BW Medical Accountants have a good working knowledge of General Practice and are keenly aware of the challenges Practices face within the changing environment of the NHS.  Benfield Park have been very impressed by the way BW Medical continue to deliver the range of services they provide from Accounts to Tax and NHS Pension advice. 

    We have found Practice consultation and engagement from BW Medical specifically helpful to shape the future of the Practice.

    Senior Partner
    Benfield Park Medical Group, Newcastle
  • We had no hesitation in moving to BW Medical Accountants.  For any business your accountant is integral, and for us one of the most important factors to this relationship is to have a personal and trusting approach, which BW have undoubtedly achieved. 

    The service we receive and the interest they show in our practice assures us that they have a genuine interest in us and commitment to us.  More importantly they are always helpful and polite to answer even the dumbest of questions!  They give us confidence and reassurance knowing that they are always very up-to-date with all the numerous changes within general practice and we would have no hesitation in recommending them to other practices seeking a professional and personal accountancy service.

    Jackie Rotherham, Practice Manager
    The James Street Family Practice, Lincolnshire
  • We moved to BW Medical Accountants in 2013 and we are delighted that we have.  Having been in the same business for over 20 years it is important to have a relationship with the accountancy team but most importantly you need to have trust.  We made the decision to move our business to BW Medical Accountants and having worked with the Team especially Tina we are very satisfied.  Tina going through the accounts brought to our attention many things that I was not aware of in the past.  The first years' experience can only be described as excellent.

    Customer service is first and foremost with BW and this shines through as each and every one of them are approachable, helpful and most importantly understand and know the business.  General practice is complex and is going to get more complex in the coming years.  We need Accountants who truly understand our business. We as a practice and as individuals would certainly recommend BW Medical Accountants.

    Gloria Middleton, Managing Partner
    Westbourne Medical Group, Sunderland
  • We changed to BW Medical Accountants and I would say we have just had the most transparent and understandable end of year meeting and the best planning advice I have ever had in 16 years of practice.

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