NHS employees could pay up to an extra 45% annual allowance charge on pension savings
The Annual Allowance is the maximum amount that can be invested in a pension scheme each tax year. This limit covers all contributions to pension schemes (excluding the State Pension) and is set by HMRC, so will impact a great number of high earning NHS staff, such as Consultants and GPs.
The standard Annual Allowance limit has been set at £40,000.
If an individual’s pension contributions exceed the Annual Allowance (in any tax year), they could be hit with a tax charge on the additional amount.
There is good news, however. The NHS Pension Scheme will pay the tax charge to HMRC on behalf of affected members, provided an application is made before the deadline.
In order to calculate whether the Annual Allowance has been breached, you will need to know your pension input amount from all schemes: the NHS “1995” scheme, the “2015” scheme or both, plus private pensions. Calculating these figures is far from straightforward, so to help NHS staff, we have teamed up with a financial advisory firm with experience of carrying out the calculations to offer a free consultation to help work out if the Annual Allowance has been breached.
For those doctors who have already paid a penalty tax charge in the 2018/19 tax year or later, it should be possible to reclaim the amount paid from HMRC and have the NHS Pensions Scheme pay it instead.
To claim your free session visit https://www.pension-claims.com/annual-allowance/ or call Greg directly on 0151 329 0775.