Thousands of medical professionals may get unexpected tax bills
Medical professionals who work for both the NHS and privately could face unexpected tax charges because of changes to pensions rules.
Nimesh Shah, Partner at Blick Rothenberg, said: “Thousands of medical professionals may be unaware of the new rules which came into effect on 6 April 2014 and they could be facing unexpected bill.
“The first problem with the new rules is the reduction in the amount that a person can contribute annually to their pension. This is now capped at £40,000 and contributions in excess of this amount will no longer attract tax relief.
“Secondly, the amount a person can build up in their pension is also capped at £1.25 million and if they breach this limit, they could face a tax charge of 55% on the excess.”
Nimesh added: “The rules are particularly troublesome to medical professionals who are members of their own private pension and the NHS pension schemes. To test these new limits you have to combine private pension arrangements and the NHS pension scheme. The problem with the NHS pension scheme is that it is difficult to assess the contributions being made. Therefore, these limits can be unknowingly and quite easily breached.
“Medical professionals should be reviewing their pensions as soon as possible but not make any hasty decisions to leave the NHS scheme, as this can still provide valuable benefits despite the tax charges.”
For further information, please contact Nimesh Shah.