Welcome to our new apprentices
November 8, 2023
Changes to pension allowances mean that GPs will need to submit new tax calculations to HMRC for the 2011/12 financial year.
However it is unlikely that GPs will have access to the figures required to make these calculations in time, meaning they could face substantial financial penalties, accountants have warned.
Recent changes to pension tax rules mean that tax relief is only available on the first £50,000 contributed to a pension each year, down from the previous cap of £255,000. The lifetime allowance for income a person can receive tax free from their pension has also been cut by 16%, from £1.8m to £1.5m.
Due to these changes, GPs will need to complete a new tax return demonstrating that they have stayed within the new pension limits.
However, the information they need to complete their 2011/12 tax return will not be available from the NHS pension scheme before the January 2013 submission date. Failure to submit the 2011/12 tax return could see GPs facing potential interest charges and even fines.
Keith Taylor, head of medical services at RMT Accountants, explained: ‘Because the NHS pension scheme is unable to provide the information that members need, the likelihood is that, without proactive work, the deadline for submitting tax returns will pass before GPs get the information required to complete them accurately.
‘At a time when HMRC is focused on bringing in as much tax revenue as possible, it’s very unlikely that they will give much leeway to anyone submitting inaccurate tax returns, even if the reasons behind this are not down to the individual in question.
‘We’re already working with dozens of practices to try to clarify each doctor’s individual situation, and would strongly urge every GP to find out what they need to do about their own tax returns.’
GP reported earlier in the year that GPs could face extra accountant fees due to a need to submit provisional tax returns that must then be amended, creating extra work for accountants.
Please contact specialist GP accountant Keith Taylor for more information. 0191 2569500