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.”