Pensions  

GPs can file late applications to cover tax bills after pressure

GPs can file late applications to cover tax bills after pressure
 

NHS staff have been given the option to make a late application to have their scheme cover annual allowance tax bills after the industry warned many GPs would not have completed paperwork in time.

Following industry pressure in recent months, NHS England and NHS Improvement said it will accept late applications for its annual allowance compensation policy claim form, with the current deadline set for the end of the week (February 11).

It said late forms will be accepted where, through no fault of their own, clinicians have not yet received a pension savings statement for 2019/20. 

Article continues after advert

“They will be able to submit their application for six months after receiving their pension savings statement,” it said. “If a clinician is submitting their form late, they should follow the current instructions regarding authorisation of their application, which are outlined on the application form.”

NHSEI said feedback it received suggested that staff have been affected by pensions tax rules and the annual allowance, which has had an impact on clinical staff who want to work additional hours.

As a result of this, GPs in England and Wales are able to claim pension tax compensation via their scheme.

Scheme pays allows savers to settle annual allowance tax charges through their pension scheme without needing to find cash upfront

To use this GPs need to submit a ‘scheme pays’ election to NHS Pensions before sending in an annual allowance compensation policy claim form by February 11, 2022.

But earlier this week, the industry warned GPs could be forced to take on a large tax bill themselves if the deadline is not scrapped.

Graham Crossley, head of technical business development at Quilter Financial Advisers, said: “It is good to see awareness and pressure from numerous sources has paid off. I am glad that common sense has prevailed as this will certainly take the pressure off some GPs.”

However, he added that he was not convinced that the measures go far enough.

“It still feels like more importance is placed on the administration of the process, rather than delivering on the promise that clinicians will be fully compensated in retirement for the effect of the 2019/20 annual allowance charges. 

“There is no valid reason to have any deadline on completing the annual allowance compensation policy application form and it would make more sense to have a failsafe process at retirement to ensure that no eligible clinician misses out.”

Separately, in March 2020, the government introduced measures to allow recently retired NHS staff to return to work and tackle the pandemic without suffering a penalty on their pension.

But last month, Quilter warned there could be an exodus of NHS staff in March as Covid rules, which protected returning workers from receiving a pension penalty, came to an end.

Data showed more than 7,000 doctors and nurses may be affected by these protections coming to an end and could choose to retire as a result.

sonia.rach@ft.com