Pension savings statements for dentists
From the start of October the NHS Pensions agency have been sending ‘Pension Savings Statements’ to those members who, they believe, are affected by this change. The statement shows the growth for the tax year 2011/12, but is only sent to those where the growth is above the current annual allowance of £50,000. From the 2014/15 tax year the annual allowance is set to reduce to a lower threshold of £40,000.
If you do not receive a statement the indication is that you are not affected by the annual allowance. However, we have already found that NHS Pensions records are far from accurate. The deadline for sending the statements was 6th October 2013 but we are aware that NHS Pensions are still sending them out now. In addition NHS Pensions will not be aware of any supplemental personal pension arrangements you may have in place, which, when taken into account with the growth in the NHS scheme, may put you above the allowance.
If the pension savings statement shows that an annual allowance tax charge is due for the 2011/12 tax year and the charge is more than £2,000 you can elect for the scheme to pay the tax due on your behalf for a reduction in final benefits when you draw your pension. That election has to be made by 31st December 2013. Alternatively, you can pay the charge personally via self assessment. For 2011/12 that payment was due to be made by 31st January 2013. For those where the charge is £2,000 or less the payment must be made via self assessment. This is obviously an important point to consider and appropriate advice should be sought.
Finally, for those who estimated the annual allowance charge on their 2011/12 self assessment return this now needs to be amended to show the updated figures and any applicable payment made where the position was previously underestimated. The deadline for this is the 31st January 2014.