The deadline for members of the NHS Pension Scheme to make use of the voluntary Scheme Pays facility for 2018/19 pension tax liabilities has been extended by three months from 31 July to 31 October 2020, as a result of the pressures from the ongoing coronavirus pandemic.
The Scheme Pays deadline for mandatory scheme pays remains as 31 July 2020. Mandatory Scheme Pays is available if the pension input amount in either the 1995/2008 scheme or the 2015 scheme is more than the standard annual allowance.
The extension is to ensure NHS staff can evaluate their 2018/19 pensions tax liability and make an informed choice about whether to use Scheme Pays or not. Scheme Pays is available to members of the NHS Pension scheme, who have a pensions tax liability. An election under Scheme Pays means that the members’ annual allowance tax charge is paid directly to HMRC from their pension benefits in exchange for a reduction in pension benefits at retirement.
The extended deadline of 31 October 2020 is the date by which members, who want to have an annual allowance pension tax liability settled by Scheme Pays, must have submitted their election form for 2018/19 tax liabilities. The deadline for electing for all forms of Scheme Pays to settle 2019/20 pension tax liabilities remains 31 July 2021.
The Department for Health and Social Care (DHSC) will review the extension again at the end of July, taking into consideration the level of the pandemic at that time.
How can M+A Partners help?
At M+A Partners our clients who needed to use Scheme Pays to settle 2018/19 pension tax liabilities have already made that decision. However, there may be some exceptions because NHS Pensions continue to issue 2018/19 Pensions Annual Allowance statements.
If you or your NHS colleagues are affected by the receipt of a late Annual Allowance Statement for 2018/19 and need advice on what this means for your tax affairs, and may need to utilise the extended deadline for a 2018/19 Scheme Pays election, please contact Clare Goodswen to ask for assistance.
At M+A Partners, we are here to help and support you as you navigate through the government’s coronavirus support payment measures during these challenging times. If you need help then please get in touch.