Will there be changes on pensions? There have been many stories in the press about GPs and senior hospital doctors refusing to take on extra shifts and additional responsibilities due to the additional tax they are required to pay on the extra pension contributions paid by the NHS. A number of solutions have been put forward. There are now strong rumours that the tapering of the annual pension allowance for those with income over £150,000 may be abolished or amended for all taxpayers, not just those working in the NHS.
Listen out for a possible announcement in the Spring Budget, together with other changes to pension tax relief.
Health Secretary Jeane Freeman has again called on the UK Government to find a permanent solution to the pension taxation issue impacting vital NHS staff and frontline services.
In a letter, Ms Freeman urged UK Chancellor Sajid Javid to take decisive action to ensure pension and taxation rules no longer undermine delivery of frontline health services for the people of Scotland and other UK nations.
As a result of UK Government pension taxation rules, highly experienced staff can face unexpected additional tax liabilities. This has led to some staff having to reduce their hours or retire earlier than expected.
In response the Scottish Government introduced a temporary opt-in policy for all affected NHS staff in November 2019 to ensure crucial services are maintained as demand on the health service continues to increase.
However, this interim measure is due to come to an end on 31 March 2020 with the end of the current financial year, and a permanent solution must be found by the UK Government.
Need more information?
If you need any more guidance on pensions, please do not hesitate to get in touch with our team. The team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.
Our fantastic team at A&C Chartered Accountants are here to help.