Over 1,600 GPs miss out on pension tax compensation due to ‘admin failures’
More than 1,600 GPs are missing out on millions of pounds in pension tax compensation due to ‘administrative failures’, a new data analysis has revealed.
FOI data from NHS Business Services Authority (NHSBSA) gathered by Medifintech, a specialist provider of NHS pension analysis, has found that nearly 4,000 NHS staff will miss out on over £31 million in tax compensation.
It showed that GPs are the largest affected cohort, with 1,628 missing out on compensation. On average, GPs are missing out on £4,451.93, according to the data (see box).
Financial services provider Quilter explained that the issue stems from the 2019/20 Pensions Annual Allowance Charge Compensation Scheme (PAACCS), designed to ‘shield’ NHS staff from pension tax charges caused by annual allowance breaches.
However, despite registering for scheme pays elections, ‘confusing’ guidance has meant many didn’t file the necessary additional paperwork, it said.
The FOI found 3,888 NHS members are set to miss out on PAACCS despite registering for scheme pays elections.
When applying for the compensation scheme, staff had to register both a Scheme Pays election and a separate PAACCS application, a dual-step process ‘many are unaware of’, Quilter said.
It said: ‘Indeed, NHS England’s official PAACCS webpage still lacks updated guidance following the McCloud remedy, further muddying the waters for affected members.
‘Quilter believes the rigid deadline system, with no flexibility to apply retrospectively, fails to account for the complex realities of tax and pension administration.’
The FOI data in full
|
Employment Type |
Affected members |
Missed tax compensation |
Average |
|
GP |
1,628 |
£7,247,748.97 |
£4,451.93 |
|
Hospital Doctor |
1,401 |
£11,640,788.39 |
£8,308.91 |
|
Officer |
545 |
£8,533,164.83 |
£15,657.18 |
|
GDP |
187 |
£2,382,638.19 |
£12,741.38 |
|
Non-Special Class Nurse |
87 |
£1,040,805.93 |
£11,963.29 |
|
Special Class Nurse |
38 |
£499,292.30 |
£13,139.27 |
|
Hospital Dentist |
2 |
£10,790.05 |
£5,395.03 |
|
Total |
3,888 |
£31,355,228.66 |
£8,064.62 |
Source: Quilter, NHS Business Services Authority
Quilter’s NHS pension specialist Graham Crossley said that NHS staff ‘deserve’ a pension system that supports them, not one that ‘penalises them due to administrative failure’.
He said: ‘Thousands of NHS professionals, including frontline doctors, GPs, and nurses, took on extra work despite the tax risks – trusting they would be protected from financial penalties.
‘Instead, they are being denied relief due to bureaucratic red tape, leaving them with avoidable tax bills in a period of unprecedented healthcare strain.’
He said that it is up to the Government and NHS England to now act and ‘repair the damage’ in order to prevent future failings.
He added: ‘We want to see both the deadline for PAACCS abolished and allow members to retrospectively claim for compensation at the time of retirement, giving a significant cohort the outcome they deserve.
‘Furthermore, NHS Pensions must do more to prevent others falling through a similar gap and check that if someone applied for a 2019/20 scheme pays election, to also see if they applied for the compensation scheme. If not, they must proactively communicate with those members.’
An NHSBSA spokesperson told Pulse: ‘Not all members who have made a 2019/20 Scheme Pays application will be eligible for the Pension Annual Allowance Compensation Scheme (PAACCS).
‘Information about PAACCS, including eligibility, is available on the NHS England website. We’re working with NHS England to update information so that members affected by the Public Service Pensions Remedy (McCloud) understand whether they’re eligible for PAACCS and how to apply.
‘Updates will be made to both the NHS England website and the NHSBSA website and we’ll update Employers so they can support their NHS Pension Scheme members with applications for PAACCS.’
Pulse has contacted NHS England for comment.
Earlier this year, the BMA found that one in four GPs reduced their workload this year due to issues related to pension taxation rules, amounting to a potential loss of four million appointments in England.
Last week, an MP and former home secretary slammed the company Capita for operating ‘an extremely outdated and insufficient model’, causing ‘unacceptable’ errors and delays to GP pensions.
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READERS' COMMENTS [3]
Please note, only GPs are permitted to add comments to articles
Have you forgotten those GPs who retired in year 18/19 having paid AA tax penalty then clobbered with a 20 year YES 20 Years for breaching the then LTA. It seems grossly unfair that I am required to pay a tax penalty for 20 years and a GP who retires the next year pays nothing. Where is the equity where is the justice. Come on BMA Where is our representation?
yes JB where is the justice? So right. As a GP you should be able to concentrate on seeing to the needs of patients without penalties that may not be immediately obvious, for your hard work and simply trying to earn a decent living. These tax rules do seem to be very inconsistent and like a type of ‘moving tax-goalpost’. Government and HMRC should be putting much better LTA on the undeserved bonuses of chief execs and tax the profits of huge companies to a greater extent, then perhaps the LTA on GPs could be improved or erased. Unfortunately, GPs have always had to think of HMRC shenanigans as well as GP role. Even many Chartered Accountants agree the tax rules should be a lot less tangled: its probably ‘mind-bending’ even for those working for HMRC, although it helps to keep so many in work there, I suppose: you should not have to be a GP and an Accountant. Pressure on Government is needed, so they raise bigger taxes on Multinationals’ profits, (we want them to make an honest profit, just not a greedy, huge profit) and undeserving CEOs bonuses, rather than a humble GP.
A major problem is committees for any practical action to be taken, whether BMA or Government or HMRC committees, just
take forever: a lifetime even: maybe that’s where the jargon ‘LTA’ comes from. After the action is taken, then they all see the unforeseen consequences of their actions and so on; then they take action to put right their bungled decisions, (by having another committee meeting, perhaps.) So a final decision on LTAs could actually take an actual ‘lifetime’ so to speak: LTA yo-yo
Has any Chief Exec or Politician or Head of HMRC ever been admonished for their decision to start the LTA-farce for humble GPs or not?
Still waiting on my pension statement from last yr !