New 2027 deadline for McCloud pension members seeking help with tax charges
The deadline set for GPs affected by McCloud and wanting to claim support with their NHS pension taxes has been extended – ensuring they won’t be unfairly financially penalised.
HMRC announced today that the ‘mandatory scheme pays’ deadline has been moved from 6 July 2025 to 6 July 2027 for individuals impacted by the McCloud remedy, due to delays in them receiving vital paperwork.
The change, which affects GPs, practice manager partners and other clinical and non-clinical partners, has been welcomed by pension experts as ‘pragmatic.’
The scheme pays arrangement helps NHS pension members who incur tax charges because their pension pot growth has breached the annual allowance.
Rather than having to find the money to pay the tax charge upfront from their own pocket they can elect the NHS pension scheme administrator – NHSBSA – to settle the charge on their behalf. On retirement, a deduction is then applied to their pension benefits.
Members affected by McCloud were originally given the 6 July 2025 deadline to elect for the scheme pays mechanism if they found they had tax charges for any of the years 2019/20 to 2022/23.
However, there have been huge delays to them receiving pensions statements called remedial pension savings statements (RPSS), which are needed to calculate where tax charges apply. This has meant many individuals missed the July 2025 date, causing fears they would incur financial penalties.
Graham Crossley, NHS pensions specialist at Quilter, said people who received their RPSS after July or who are still waiting to receive it and looking to use scheme pays have been worried they might have to pay late payment interest, which can amount to thousands of pounds.
He also explained: ‘Others assumed that since they have missed the scheme pays deadline, they would have to find the money to pay tax charges themselves, which again in some cases can be tens of thousands of pounds. We have had people in tears over this issue.
‘The extension of the deadline to July 2027 takes that fear away. It is a very welcome and pragmatic decision from Government.’
Mr Crossley added: ‘Changing the deadline avoids creating unnecessary two-tier outcomes. Crucially, it provides a fair opportunity for members to use scheme pays to cover annual allowance tax charges without having to find large sums from their own pocket.’
He further warned that while this delay gives breathing space, it’s important that members who have received their RPSS don’t wait until the last minute to process the annual allowance changes with HMRC.
‘We would still urge members to seek advice or support from their accountant, financial adviser or NHS pension specialist firm, to ensure deadlines are not missed and elections are submitted correctly.’
A newsletter issued today by HMRC said regulations will be updated to reflect the new deadline but that the Treasury had already agreed to it.
It said: ‘We are aware that some schemes are still issuing statements relating to the public service pension remedy. So that those members do not lose out, ministers have now agreed to move the mandatory scheme pays deadline to 6 July 2027.’
RPSSs were originally supposed to be sent to members by 6 October 2024. However, tens of thousands are still outstanding, warns Mr Crossley.
A version of this article was first published by Pulse’s sister title Management In Practice
