In response to a need for healthcare workers during COVID-19, the government introduced amended rules surrounding tapered annual allowance to help get medical personnel back in the field, but there might be even more good news on the horizon.
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.
It can be difficult to work out exactly how the amended annual allowance rules pertain to you, so calculating for your specific circumstances can be daunting, and many who have tried worry that they haven’t done everything correctly. This has created a headache for doctors and dentists come tax time.
NHS Pension Annual Allowance Compensation
The good news is that if you were charged or are expecting a charge for exceeding the annual allowance in the 2019/20 tax year, you could get reimbursed.
Clinicians who are members of the NHS Pension Scheme (NHSPS) who meet eligibility requirements and are subject to an annual allowance tax charge relating to the 2019/20 tax year may have their charges repaid by the NHSPS.
So, if you were worried about having to pay the tax charge out of your own pocket, worry no more! Even if you think you might be liable, make sure you check and avoid any unnecessary payments to the government.
Are you eligible?
You could be an ‘Eligible Clinician’ if you:
- You were a member of the NHSPS in the tax year 2019/20
- You were employed or engaged in a clinical role delivering care to NHS patients that requires registration with an appropriate healthcare regulatory body.
- You have a valid registration for the period of the 2019/20 ‘Scheme Pays’ election.
- You receive a tax charge associated with breaching the annual allowance, including the tapered annual allowance in 2019/20, in respect of membership of the 1995/2008 and/or 2015 NHS pension schemes, and use ‘Scheme Pays’ election to pay the tax charge.
How do you seek compensation?
If you meet eligibility requirements, you have some work to do. Here’s the process to follow to request your compensation.
- Firstly, calculate your annual allowance tax liability
- Then, complete an NHS scheme pays election form before 31 July, 2021
- Fill out a 2019/20 annual allowance charge compensation policy application form, and
- Complete your HMRC self-assessment.
Don’t forget…
Take care not to miss the filing deadlines because you will miss out on the compensation you are owed. It is up to the taxpayer to go through the process and ensure that NHS pensions have received the forms by the relevant deadlines.
Let’s get started calculating your pension allowance
Dental & Medical Financial Services has been helping doctors and dentists with 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. We’ll help you through the process, so if you are unsure if you’re due compensation, get in touch with your financial planning expert today.
Do you need help with pension calculations?
Investments | Financial Planning | Retirement | Save Tax | Protection |
Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.