Your guide to Annual Allowance provisions for the 2018/19 tax year (for General Medical Practitioners 2017/2018 tax year)
The amount of tax relief on pension contributions is limited to an Annual Allowance of £40,000 in each tax year – with further ‘tapered’ reductions for people who earn over £110,000.
If you exceed the Annual Allowance, you may have to pay a tax charge. This can either be paid directly to HMRC or by ‘Scheme Pays’ arrangement through your SPPA-administered pension scheme.
What happens if you exceed the Annual Allowance?
If you’re a member of an SPPA-administered pension scheme (other than General Medical Practitioners whose arrangements are covered below), you’ll receive a pension savings statement by 6 October 2019 if you have exceeded the Annual Allowance in a single registered scheme. This will be dependent on us having received all relevant information from your employer for the period up to 31 March 2019 by 6 July 2019.
You can also request a pension saving statement which will either be issued by 6 October 2019 (for requests received before 6 July 2019) or up to 3 months from the date of request after 6 July 2019.
If you want to elect for mandatory ‘Scheme Pays’ to pay any tax charge you’ll have to apply by 31 July 2020 or by your retirement date, if earlier. Scheme Pays applications for mandatory tax charges received by that date will be processed and paid to HMRC by 31 January 2021.
Note: SPPA now accepts elections for Voluntary Scheme Pays for tax charges in excess of £1000. These applications can be submitted at any time and will be paid in the next HMRC reporting period.
General Medical Practitioners Annual Allowance arrangements for 2017/2018
If you’re a General Medical Practitioner, your pension savings statement can only be produced after we’ve received your certified earnings data for 2017/18 from Practitioner Services Division.
If we have your information before 6 July 2019, you will receive a statement by 6 October 2019 if you’ve exceeded the Annual Allowance in a single registered scheme. We will also send out pension savings statements by this date to any General Medical Practitioner member who has requested a statement before 6 July 2019.
If you request your statement after 6 July 2019, we will provide it up to three months from the date of your request as long as we have the correct information from your employer.
As General Medical Practitioner members will not know their pension input amounts before the Scheme Pays election deadline on 31 July 2019, we recommend that you submit your Scheme Pays election with an estimated tax charge amount of a minimum value of £2000.
This practice is in line with HMRC guidance and will help you to meet the statutory deadline for the Scheme Pays election. You will be required to revise, cancel or confirm your estimated figure by 21 December 2019 following receipt of your 2017/18 pension savings statement.
All Scheme Pays applications for mandatory or voluntary payment of tax charges received by that date will be processed and paid to HMRC by 31 January 2020.
Please note that if you’re applying for voluntary Scheme Pays for 2017/2018 members may incur penalties and interest charges from HMRC as their deadline date was 31 January 2019
To make a Scheme Pays election, please download and complete the application form.