NHS Pension - Annual Allowance Information Update

The change in the tax rules from the 6th April 2011 means that any pension contributions in excess of the new Annual Allowance (AA) of £50,000 (or ‘Deemed Contribution’ for defined benefit schemes such as the NHS Pension Scheme (NHSP)), will attract a tax charge at a rate of tax equivalent to marginal rate of tax paid by the individual.

GP’s will be required to estimate their ‘Deemed Contribution’ to establish whether any tax is due when submitting the 2011/12 tax return information. For GP’s who have a ‘Deemed Contribution’ in excess of £50,000 in the 2011/12 tax year, it will be possible to carry forward any unused relief from the previous three tax years (assuming ‘Deemed Contributions’ in those years were less than £50,000).

In order to establish whether there is any unused allowance from earlier years, GP’s will need to request details of their Pension Input Amount (PIAs) for the earlier tax years, to be able to determine whether any carry forward allowances are available. However, NHS Pensions (NHSP) are currently not providing any information with regard to PIA’s for any tax years, thereby making it almost impossible for GP’s to make accurate estimates of their tax position