Tax  

Doctors warned of high tax bills as records out of date

Doctors warned of high tax bills as records out of date

Only one quarter of doctors’ pension records are up to date for the 2017/18 tax year, data has shown, leaving GPs at the mercy of unexpected tax bills.

A Freedom of Information request by Quilter to the NHS Business Services Authority has revealed only 26 per cent of GPs’ pension records for 2017/18 are up to date.

The FOI confirmed that out of 42,451 active practitioner records in England, 11,232 had been updated as of March 31, 2018.

But NHS Business Services Authority stated it could not comment on whether the other 31,219 should have a 2017/18 update or if the record should no longer be active so could not say for definite how many incomplete records there are.

Experts have warned without access to these records, doctors are unaware if they will be hit by a significant tax bill because they have breached their annual allowance.

Also, the deadline to submit a scheme pays form - which allows individuals to pay their tax bill from their pension and not as an upfront cost - passed in July 2018.

However, the NHS is able to consider late applications in these circumstances.

To date the NHS Business Services Authority has received 6,415 scheme pays elections for 2017/18.

Graham Crossley, head of development in the dental and medical division at Quilter Financial Advisers, said: “Annual allowance charges can cost these medical professionals tens of thousands of pounds and if that bill is coming unexpectedly, it will be a substantial shock to the system.

"It is possible for people to use 'scheme pays' to settle these huge bills. 

“However, to use this facility you need to submit a Scheme Pays Election form and the deadline for this option passed on July 31 last year for the 2017/18 tax year and so people who have still to get up to date records may not have elected because they didn’t think they needed to.

"However, the NHS can consider late applications in these types of circumstances, so it’s important to ask the question.”

He added: “These tax bills are complicated and we have found several mistakes in the amount people are being charged so it’s worth speaking to a specialist adviser who can ensure you are paying only as much as you need to and doing it in the best way possible.”

Dr Richard Vautrey, chairman of the British Medical Association’s GP committee, agreed the failure to update pension records meant GPs may be unaware that they have breached their annual tax-free allowance on contributions.

Dr Vautrey said: “It is a disgrace that bureaucratic delays are preventing so many GPs from accessing vital pension statements.

“The current pensions tax system is already far too complicated and opaque, however, without access to these statements family doctors will be completely blind to potentially huge tax charges.

“On top of this, GPs are still being kept in the dark over how NHS England will pay GPs' pension tax charges this winter and the BMA has written to NHSE calling for urgent reassurances on this.