Pre-empt your deadline on superannuation
Reduce your stress levels, and those of your accountants, by facilitating the completion of your GP partner and locum superannuation certificates, says Dr John Couch
At this time of year accountants are focused on getting tax returns in for all GPs before the January deadline. This is followed by a mad scramble to get GP partner and
locum superannuation certificates (SACs) completed. We can greatly reduce our accountants' stress levels, save them time, and avoid unnecessary fees by being more proactive this tax year.
Last year was the first time the new superannuation arrangements were in place. To remind you, GP partners now pay superannuation on NHS profits rather than NHS income as previously.
This means we pay only an estimated monthly figure to our main PCT during each tax year.
However, once the accounts for that tax year are agreed, a balancing figure, which can be positive or negative, is applied to ensure accuracy. This must be agreed with the PCT via the SAC.
Due to the fact that practice accounts are often not ready for several months after the financial year end, the balancing payment or reimbursement is significantly delayed. The 2005/6 year SAC is due by 4 April 2007 and any balancing payment made after this will mean tax relief will not be available for an extra year year.
Last time many GPs had to make large extra payments after 5 April 2006 and consequently cannot claim their relief until January 2008.
Last year the complicated certificates and tardy Pensions Agency clarification of problems delayed accountants. Although they should be more used to the format this year, they do require extra details potentially causing delays once more. You can pre-empt these by taking action now.
1 Check your accountants have started your SAC – a gentle written reminder will ensure they remain focused.
2 Provide the new information – via the same letter include the extra information required for 2006/7 which is as follows:
• GP practice reference number
• Host PCT name
• Actual date each partner joined NHS
• NHSPS reference number for each GP
3 Check attribution of 2005/6 superannuation payments on account – PCTs may
have been deducting practice amounts, but have they been attributing them correctly to individual GPs? Check now to save problems later.
4 Make extra payments before 5 April 2007 – if applicable. Send cheques to the PCT with your certificates. This will ensure you get tax relief much sooner.
Don't forget the forms
If you are an exclusive GP locum or have done locums to supplement your income, follow the steps above and also include copies of any GP solo and locum forms A and B sent to your host PCT.
Even if you are a salaried GP this is a good time to double-check that your employer has deducted the correct amount of employee superannuation (6 per cent) and paid employer (14 per cent) contributions on your behalf.
Sadly the superannuation system is now more complicated for us all, increasing the risk of errors.
I strongly advise that you keep every piece of paper filed carefully and also ask the pensions agency to send a printout of your contributions annually. Check this against your records.
It is much easier to sort out mistakes early than many years later when you retire. There is no alternative checking system
so your pension depends on your own
John Couch is a GP in Ashford, Middlesex