Up to 50% of pensions statements being sent to NHS pension members affected by the McCloud remedy may contain incorrect information, medical accountants have estimated.
Remedial pension savings statements (RPSS) that carry updated details about a member’s retirement pot are needed to recalculate their tax position and determine if they are due tax rebates or if they owe more tax.
The tax position may have changed for those whose pensionable service for the years between 1 April 2015 and 31 March 2022 was ‘rolled back’ into the 1995/2008 pension ‘legacy’ scheme last October. This measure was taken under the McCloud remedy that sought to address age discrimination caused by changes in 2015 to public sector pensions.
Affected members, including GPs, practice managers and practice staff, have only until 31 January 2025 to complete a tax reassessment process (via an HMRC digital service) to determine where they stand financially.
However, they cannot start without an RPSS, which were due to be sent out by the NHS Business Services Authority by October 6.
The Association of Independent Specialist Medical Accountants (AISMA) has now warned that errors have been identified in the first batch of statements sent out.
A survey carried out among AISMA members revealed that almost 90% of respondents had identified errors on the statements they had seen. Mistakes include overstated pension growth figures and discrepancies between RPSS and HMRC records on annual allowance tax charges settled by NHS Pensions on behalf of scheme members.
Based on those findings, AISMA has estimated that up to 50% of RPSSs could include incorrect data.
Andy Pow, AISMA board member, said it has left many NHS pension members ‘struggling to make sense of the numbers’.
‘We are concerned that the major discrepancies already identified in pension growth figures will lead doctors and other healthcare professionals to lose trust in the process.’
Mr Pow added that doctors are also being left in the dark about how they should deal with their 2023/24 tax disclosures, which are required imminently.
AISMA has further warned about delays in the system, highlighting that many pension scheme members haven’t even yet received their statements, and now have just three months to meet the January 31 deadline for the tax recalculation process.
Earlier this month, the BMA also revealed that thousands of doctors hadn’t received their RPSSs on time.
As a result, AISMA has joined in with calls from the BMA, pension advisors, and other accountancy and tax organisations for the Government to extend the January 2025 deadline.
Deborah Wood, AISMA chairman, said: ‘Doctors and their accountants were already under extreme pressure in terms of meeting the 31 January deadline to re-submit eight years’ worth of tax information to HMRC as part of the McCloud remedy process.’
However, she added that the situation has been made even more complex with the need to ‘review all remedial pension savings statements and arrange for the correction of errors before the correct tax calculations can be made’.
‘The sheer volume of processing required in the short period of time available means it will be virtually impossible for the 31 January deadline to be met,’ Ms Wood said.
AISMA is calling for the deadline to be moved to 30 September 2026, which Ms Wood said was a ‘compromise position’ to avoid ‘kicking the can further down the road’.
