The NHS Business Services Authority has extended the voluntary scheme pays deadline by eight months to help members who have been hit with significant tax bills.
The NHS Business Services Authority confirmed the voluntary scheme pays deadline for the 2019/20 tax year has been extended from July 31, 2021 to March 31, 2022 in order to support frontline workers deal with the ongoing impact of Covid-19.
This is the second year this deadline has been extended, after it was pushed back by the NHS Business Services Authority in August last year amid the pandemic, with it stating at the time that it was "sympathetic to the situation" that NHS staff were in as frontline healthcare workers.
The deadline is the date by which GPs who want to have an annual allowance pension tax liability settled by way of scheme pays must have submitted their election form.
According to the NHS Business Services Authority it is no longer a requirement for voluntary scheme pays to have an annual allowance charge of more than £2,000.
NHS Pensions offers both mandatory and voluntary scheme pays facilities. Mandatory scheme pays is only available if the growth in the members’ pension benefits is more than the standard annual allowance.
No changes were made to the mandatory scheme pays deadline, which is July 31, 2021, as the NHS Business Services Authority has no authority to make such changes.
The taper issue
The tapered annual allowance gradually reduces the allowance for those on high incomes, meaning they are more likely to suffer an annual tax charge on contributions and a lifetime allowance tax charge on their benefits.
The rules have forced senior clinicians and other high earning public sector workers to either leave their pension scheme, cut down on their working hours or retire early to avoid punitive tax bills.
While the Budget in March 2020 lifted the ‘adjusted income’ and ‘threshold income’ levels under the tapered annual allowance by £90,000 for the 2020/21 tax year, there is still a legacy of annual allowance issues for many doctors.
Doctors who are taking on extra shifts due to the current pandemic are at risk of being hit with large tax bills because of continuing issues with this charge.
amy.austin@ft.com
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