Doctors who are members of the NHS Pension Scheme who need to report an Annual Allowance tax liability the 31 January on-line Self-Assessment deadline is fast approaching.
To help doctors navigate the situation HMRC and NHS Pensions have provided guidance on how to handle their annual allowance tax liabilities for the 2023/24 tax year. But for those doctors where their Pension Savings Statement (PSS) or for those impacted by the McCloud Remedy their Remediable Pension Savings Statement (RPSS) will not be available before the Self-Assessment tax return deadline of 31 January 2025, what do you need to do?
Here’s a summary of key points provided by HMRC and NHS Pensions:
1. Using Provisional Figures for Self-Assessment (On-line Deadline: 31 January 2025)
- If you’ve never submitted a tax return before, you’ll first need to register for Self-Assessment.
- If you haven’t received your PSS for 2023/24, you must complete your Self-Assessment using provisional figures.
- Estimate your pension input amount (PIA) to the best of your ability and keep records of your calculations.
- Indicate on your return that the figures are provisional to avoid a late-filing penalty.
2. Scheme Pays Election Form (SPE2) Submission (Deadline: 31 July 2025)
- If you want to use Scheme Pays to cover your tax charge, submit the SPE2 form with provisional figures by 31 July 2025.
- Tick the box to indicate the figures are estimated.
- Once you receive your final PSS, update your Self-Assessment and submit a revised SPE2 form.
3. Updating Your Tax Return (On-line Deadline: 31 January 2026)
- If the PIA for your annual allowance on your 2023/24 PSS differs from your provisional figure, update your Self-Assessment with HMRC by 31 January 2026.
- If you underpaid your tax charge, interest will be charged at the Bank of England base rate plus 2.5%, If you paid using Scheme Pays, interest will not be charged if the balance is paid by the Scheme before 14 February 2026. Your Scheme Pays arrangement will be amended to reflect your updated annual allowance charge.
4. Voluntary Scheme Pays for Late SPE2 Forms
- If you miss the 31 July 2025 deadline for the mandatory Scheme Pays, you can use what is called the Voluntary Scheme Pays facility. The Scheme will pay your tax charge using the Voluntary Scheme Pays facility.
5. No Need for a Self-Assessment Return
- If you believe your pension growth has not exceeded the £60,000 standard annual allowance, you don’t need to file a Self-Assessment unless you later discover you have a tax charge when receiving your PSS.
- If you normally file a Self-Assessment solely for your pension liability and are confident there’s no charge, inform HMRC that you no longer need to submit a return.
Doctors have been put in a very difficult position and many without any information to estimate their tax liability. It’s particularly difficult for those doctors who do not have any PIAs from before 2023/24 available to calculate any carry-forward. Doctors should however calculate the estimated charge to the best of their ability and keep records of the calculation. We would certainly recommend the use of an AISMA registered accountant to support you. There is however further guidance about how to estimate your provisional tax charge at: SAM121190 – Returns: individuals returns: provisional or estimated figures: individuals – HMRC internal manual – GOV.UK.
It also important to mention that if an incorrect RPSS has been received, all members who have a pension tax refund to claim or charge to pay will have 3 months from the date they receive their correct RPSS to use HMRC’s ‘Calculate your Public Service Pension Adjustment’ tool.
Content correct at time of writing.