If you’re still waiting to be sent your Annual Allowance bill for 2019/20, unfortunately, you might not receive it at all. This means you’ll need to calculate it yourself to determine if you will have an annual allowance charge, and alert HMRC if you do. Here are things to keep in mind when dealing with your allowance this year.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Where should you start with calculating your Annual Allowance bill?
The first place to start, even if you currently work with a financial adviser, is to attempt calculations yourself. It is better to assume you will have a charge because sometimes there is no way to know how much your allowance will be affected by the tapering rules.
It’s important to remember that eligible clinicians can have their scheme pays loan paid by the government in the 19/20 tax year and you should not pay the charge yourself.
Apply for compensation
To get compensation, you must apply for Scheme Pays by 31st July 2021.
There’s no need to wait until your NHSEI form is ready nor do you need to delay if you don’t know what your exact liability will be. You have up to four years to amend your form so go ahead and submit with an estimate so you don’t miss the deadline. This nomination form, an SPE2, is involved and complicated so take care to get all information correct.
Remember the responsibility is on you
It’s unfortunate that this burden falls to the taxpayer, because you will still be liable for any charges even if you are not sent a bill, but you can be proactive and plan for the possibility.
In summary, you will need to request a savings statement if one isn’t sent to you, you must calculate whether or not you have a charge and then make HMRC aware if so, and you are solely responsible for paying the charge or using Scheme Pays if eligible.
We can help you
Dental and medical professionals with concerns are urged to get in touch with financial planning experts.
Here at Dental & Medical Financial Services, we manage the required calculations to determine whether or not an individual might be subject to a potential tax charge as a result of the tapered pension allowance and help you through the process. Don’t delay, be sure to get your finances in order sooner rather than later, and get in touch today.
Need help with your Annual Allowance bill?
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