Pension tax letter from NHS England and NHS Improvement

piggy bank with pension written on it

A response to pension tax issues has been agreed by the Secretary of State with NHS England and NHS improvement, to support service delivery amid concerns around growing winter pressures as a result of reduced commitment by medical colleagues.

Under these measures, all members of the NHS Pension Scheme who are in active clinical roles will be able to elect to use scheme pays for annual allowance charges resulting in the 2019/20 tax year, allowing them to ask the NHS Pension Scheme to pay their annual allowance tax charge to HMRC on their behalf. Normally, in return, the member's benefits in retirement would be reduced by a corresponding amount. However, where a clinician incurs this reduction as a result of using scheme pays, an additional payment equivalent to the reduced pension benefits will be made to the member on retirement by the employer. 

A letter from Simon Stevens was sent to trusts last week which explains the measures being taken by NHS England and NHS Improvement. 

We are seeking further information to understand the detail of this for employers and we understand that implementation guidance will be produced by NHS England and NHS Improvement. 

You can read the response and the letters on NHS England and NHS improvement's website.

Find out more about annual allowance on our web pages.



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