08 February 2022
Quilter is warning today that GPs only have until Friday 11th February to file for 2019/20 annual allowance compensation, as promised by NHS England & NHS Improvement, to cover their annual allowance tax bill for 2019/20 or be forced to pay the tax out of their own pocket.
Exclusive data obtained by Quilter via a Freedom of Information request shows that over 72% of NHS pension scheme members who have exceeded the standard annual allowance in 19/20 have opted for their scheme to pay their annual allowance tax bill.
However, 28% of NHS staff who have breached the standard allowance have not elected for scheme pays (a necessary step in the compensation process) and will need to pay it themselves.
More worryingly, there is an unknown number of GPs, who have not completed the burdensome administration, that will be subject to annual allowance charges caused by the tapered annual allowance that this measure sought to address.
|
Members exceeding the standard annual allowance |
Scheme pays election |
|
|
|
|
|
|
|
|
11/12 |
22,429 |
777 |
3.46% |
|
12/13 |
11,059 |
171 |
1.55% |
|
13/14 |
22,197 |
668 |
3.01% |
|
14/15 |
22,771 |
729 |
3.20% |
|
15/16 |
15,550 |
497 |
3.20% |
|
16/17 |
25,071 |
2,992 |
11.93% |
|
17/18 |
21,702 |
6,103 |
28.12% |
|
18/19 |
14,930 |
5,673 |
38.00% |
|
19/20 |
14,295 |
10,390 |
72.68% |
|
20/21 |
10,838 |
238 |
2.20% |
|
|
|
|
|
|
Total |
180,842 |
28,238 |
|
GPs in England and Wales who wish to claim pension tax compensation under the scheme need to submit a ‘scheme pays’ election to NHS Pensions before sending in an annual allowance compensation policy claim form to Primary Care Support England / Primary Care Support Wales by 11 February 2022.
Graham Crossley, NHS pensions expert at Quilter says:
“There is a big risk that lots of GPs will not have completed the necessary paperwork to take advantage of the annual allowance compensation policy and will ultimately suffer large tax bills that they will have to foot themselves.
"With the NHS stretched, it is proving to be an incredibly busy time for GPs and understandably filling out complicated pension paperwork can prove tricky. To add insult to injury many GPs have not been issued the right information yet that enables them to work out if they even have an annual allowance charge for 2019/20.
“While the pandemic, at least in the UK, seems to be subsiding there is still significant pressure on medical services. There is no valid reason for any deadline to be imposed for the annual allowance compensation policy and we call for this deadline to be scrapped to allow GPs to get their paperwork in order.”
