Action on 2019/20 pension tax impacts
November 22, 2019
NHS England has announced the action to be taken on 2019/20 pension tax impacts:
Responding to the announcement, Andrew Pow, executive board member of the Association of Independent Specialist Medical Accountants (AISMA), said:
“This announcement may go some way to persuading NHS doctors to work the shifts needed to meet demand over the winter. However, it is important that doctors understand that the proposals relate only to their 2019/20 tax payments. Those with large annual allowance tax charges for 2018/19 will still need to pay these in January 2020.
“It is uncertain if the payment of the 2019/20 tax on retirement may lead to a benefit in kind income tax charge. While positive news at first glance, the announcement contains significant uncertainties, including the potential for some form of down the line tax charge, which may not lead to the change in behaviour that is intended.
“Doctors who have already opted out of the NHS Pension Scheme to avoid the annual allowance tax charges should talk to a specialist financial adviser as soon as possible to consider the pros and cons of re-joining the scheme.”
Read how GPonline.com reported the announcement:
BMA demands legal guarantee over pension tax offer as accountants flag ‘uncertainties’
Years of service charge disputes ‘have undermined GP funding and recruitment’
November 21, 2019
AISMA accountant Andrew Pow tells GPonline.com that long-running disputes over service charges have cost GP practices in NHS-owned premises ‘huge amounts’ of time and money and left them unable to recruit or plan ahead. Read the full article.
Pension flexibility proposals unworkable and discriminatory
October 31, 2019
Proposed flexibilities to the NHS Pension Scheme are unworkable and discriminatory, says the Association of Independent Specialist Medical Accountants (AISMA).
Responding to the government’s consultation on pension flexibilities, the association, which includes some of the UK’s foremost authorities on the NHS Pension Scheme, says that the proposals represent uninformed tinkering with the NHS Pension regulations and that a complete re-think is required that must involve changes to pensions tax legislation.
AISMA also warns that the proposals, which only apply to senior clinicians, discriminate against other groups of employees, including highly paid NHS administrators and managers who may also be affected by the annual allowance tax rules.
Deborah Wood, AISMA vice-chairman and healthcare services partner at accountancy firm MHA Moore and Smalley, said: “These proposals do not make it any easier for doctors to understand their pension position. Deciding on a reasonable percentage of pay to pension to avoid a tax charge represents a game of chance for all doctors and for GPs this is compounded by out of date records due to the underperformance of Primary Care Support England (PCSE).”
Ms Wood says that most NHS Pension Scheme members have insufficient understanding of their own pension arrangements. While the consultation suggests that a modeller will be provided to assist with planning, she says this will only be as good as the person feeding information into it.
“Doctors would welcome a simplified system that was fairer and allowed a reduction in the fees for professional accountancy, tax and pensions advice. This could be achieved if the government decides to act on the recommendation of its independent tax adviser, The Office of Tax Simplification, which is to scrap the annual allowance cap on pensions.”
Notes to editors
Click here to read AISMA response in full
Read the DHSC’s consultation here.
For further information please contact Rosalind Dewar on 01580 764713 / 07785 182732 or email firstname.lastname@example.org
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