The BMA has joined in calls for the Government to extend the ‘unrealistic’ January 2025 tax deadline for GPs affected by the McCloud remedy.
The trade union has said it’s a necessary step since thousands of doctors haven’t yet received vital pensions statements containing updated information about their retirement savings – that were supposed to be received by October 6.
The McCloud remedy sought to address age discrimination caused by changes in 2015 to public sector pensions.
As part of this, certain NHS pension members, including GPs and practice staff, had their pensionable service for the years between 1 April 2015 and 31 March 2022 ‘rolled back’ into the 1995/2008 pension ‘legacy’ scheme last October – potentially changing their tax position for those years.
Last month, HMRC launched a digital service to help members affected by McCloud calculate where they stand in terms of tax and whether they are due rebates or will end up owing money.
However, they only have until 31 January 2025 – less than four months – to complete the tax reassessment process. Members also cannot access the online tool until they have received their ‘remedial pensions savings statements’, which are sent out by the NHS Business Services Authority (NHSBSA) and include key information about their pension pots.
The statutory deadline for receipt of these statements passed last week.
The BMA has said despite reassurances the NHSBSA would meet the October deadline ‘it has failed to do so’.
Several pension schemes such as those covering doctors in Scotland and the Armed Forces have confirmed that members will not receive their RPSSs on time, it said. In addition, it had been contacted by ‘a large number of BMA members who have not received their RPSS’.
Meanwhile, other doctors have still not received their ‘normal’ annual pension statement for 2023/24.
The missing statements not only mean doctors now face an ‘unrealistic’ timeframe in which to navigate the HMRC digital service, it also leaves them in the dark on their tax position making it ‘impossible to plan their work’, the BMA has said.
It explained that doctors won’t know how much work they can take on without breaching their annual allowance, because they lack information about any unused allowance from the current financial year they could ‘carry forward’.
In response, the BMA pensions committee chair Dr Vishal Sharma has written to Tulip Siddiq, economic secretary to the Treasury and City minister, who described the delays in issuing statements by the NHSBSA as ‘unacceptable’.
Dr Sharma’s letter said: ‘For those members impacted by the McCloud judgment, this presents a further feeling of injustice given that information on their pensions savings was not provided to them for the 2022-2023 tax year. Not only does this mean that they potentially have an unknown tax liability for that period, but it also impacts on their ability to know if they have any ‘carry forward’ available in the current financial year. This prevents them from making informed decisions about whether they can take on any additional work or responsibility without breaching the annual allowance.’
In addition, the BMA has flagged a concern that delays with pension statements also affect doctors’ ability to report their annual allowance tax charge via their self-assessment tax return for 2023/24, also due by 31 January 2025.
Although HMRC extended the deadline for reporting pension tax charges for 2022/23 (for those affected by McCloud), it hasn’t said whether it will do the same again this year.
The BMA is now urging the Treasury to extend the January 2025 deadline by a year or more for completing the online tool for the McCloud Remedy and the reporting of pension tax for the 2023/24 tax year.
Dr Sharma wrote in his letter: ‘We are asking that you extend, by at least 12 months, the deadline for using the HMRC Digital Service for RPSS statements, and also allow flexibility for the reporting of annual allowance via self-assessment for 2023/24 – exactly as was done in the prior tax year for the same reason.
‘This will enable doctors and their advisors fair time to receive their statements and to prepare their returns, enabling them to continue to undertake their NHS work to the fullest of their abilities.’
Dr Sharma further pointed out the BMA doesn’t believe there is ‘sufficient capacity within NHSBSA’ to meet current demand to deliver NHS pension statements and that it is writing to the health secretary to propose solutions to ‘prevent these delays from reoccurring year on year’.
Earlier this month, pension experts and wealth management company Quilter said it was also lobbying the Government to extend the time limit set for NHS pension members affected by McCloud to complete HMRC’s tax reassessment process.
It said the tight timescale and the ‘complexity’ of the process means there’s a risk healthcare workers could miss out on critical tax rebates potentially worth thousands of pounds.
