AISMA warns of pension certificate time bomb

The Association of Independent Specialist Medical Accountants is warning some GPs to expect an additional burden of pension administration following proposed changes to pension regulations. Full time GPs aged 50 or over, particularly those paying added year pension contributions, are most likely to be affected by the changes. The new rules state that GPs with an uplift in excess of £50,000 in their annual pension value must receive an NHS Pensions Agency (NHSPA) valuation certificate no later than 6th October after the end of the tax year. This is so that tax adjustments can be made in tax returns due by 31st January and will probably require the GP to submit a certificate of pensionable profits to their PCT by 6th June. The current deadline is 28th February, eight months later and only after practice accounts have been finalised and tax returns submitted.

Deborah Wood, AISMA vice-chairman and head of healthcare services at Moore and Smalley, said: “It is impossible for GPs with practice year ends of 31st March to complete their accounts, tax returns and pension certificates by 6th June. The only solution will be for them to submit an estimated certificate of pensionable profits and this will require a significant amount of work on their behalf by their accountants.”

GPs will be penalised twice as a result of the proposed change in regulations. As well as paying a fee to their accountants for the additional work required in preparing the estimated certificate, they will also need to pay the NHSPA for a corrected valuation once the final certificate of pensionable profits has been submitted. Ms Wood understands that this fee could be hefty. As the tax position may change as a result of the corrected information this may also require amendments to tax returns, possibly incurring penalties and interest charges payable to HMRC. In addition the transitional rules for the 2011/12 tax and pensions year extend the deadline for the NHSPA report to 6th October 2013 which is a considerable time after the 31st January 2013 due date for filing the tax return.

Ms Woods said: “The proposed change in regulations has resulted in a set of pension rules that are not fit for purpose for GPs. Over the coming months AISMA will be in dialogue with the NHSPA and British Medical Association with the aim of establishing a fairer process that puts a stop to GPs having to pay unnecessary fees.” AISMA will also be monitoring PCTs’ performance in processing pension certificates to the required deadlines as they deal with the effects of the Health and Social Care Bill.

AISMA is advising GPs to consult with their accountants to find out if the annual increase in their pension value is likely to exceed £50,000. Doctors wishing to contact their local AISMA member for further advice can find details on the AISMA website.