Here are the options available for doctors who have received a statement from NHS Pensions saying their Annual Allowance has been exceeded.
The Pension Savings Statement (PSS) will set out the amount the individual doctor has deemed to have contributed to the NHS Pension Scheme in tax year 2013-14 (when the Annual Allowance was £50,000).
1. Remember that the PSS will only show pension savings into the NHS Pension Scheme. You need to factor in any other pension contributions you have made in 2013-14 (AVCs, Personal Pensions). This is to determine the full impact of the potential problem.
2. The same exercise as above is required for the previous 3 tax years 2010-11, 2011-12 and 2012-13 as there maybe unused allowances from the previous 3 tax years.
3. Calculate the unused Annual Allowance available to the doctor to carry forward and off-set against the potential Annual Allowance charge.
4. For doctors who are receiving year-on-year Pension Savings Statements from NHS Pensions, where it is likely to continue, then I would recommend that all relevant pension scheme administrators are contacted early into each tax year to enable the information to be collated in good time for tax returns etc. This will also allow for strategic pension contributions to be made if appropriate where allowances are available.
5. Do not ignore the PSS when you receive it. If there is a potential problem then ignoring it can mean missing 'Scheme Pays' deadlines and incurring interest and penalties on any unpaid tax.
If you are a high-earning doctor please get in touch to review your situation and not miss out any relevant, timely advice. Email me on firstname.lastname@example.org or telephone the office on 0117 966 5699 to arrange an introductory meeting.