NHS staff in Scotland who can show they are likely to breach the pensions annual allowance for 2019/20 will be able to receive pay in lieu of employer pension contributions, under a temporary measure the Scottish government is introducing between 1 December 2019 and 31 March 2020.
This is intended to provide doctors and other eligible staff with an alternative to reducing their working hours, pending the outcome of the UK government’s consultation on new ‘flexible accrual’ proposals and HM Treasury review of the tapered annual allowance.
The Scottish government said that no new investment would be required for this temporary policy, as employers are already funded for the pension contributions they make to staff (see bit.ly/37pXJpC).
The UK health secretary, Matt Hancock, is understood to have issued a ministerial direction instructing NHS trusts in England to introduce an emergency plan involving use of the ‘scheme pays’ rules for annual allowance tax charges. Under the plan, tax bills incurred by doctors for this tax year only will be covered by the NHS pension scheme using mandatory ‘scheme pays’. However, while this would normally result in a reduced pension at retirement, the government is understood to have agreed to make good any reduced pension, without this resulting in an unauthorised payment charge on the individual.
In contrast to the approach in Scotland, the NHS England plan will be costly for the government.
NHS staff in Scotland who can show they are likely to breach the pensions annual allowance for 2019/20 will be able to receive pay in lieu of employer pension contributions, under a temporary measure the Scottish government is introducing between 1 December 2019 and 31 March 2020.
This is intended to provide doctors and other eligible staff with an alternative to reducing their working hours, pending the outcome of the UK government’s consultation on new ‘flexible accrual’ proposals and HM Treasury review of the tapered annual allowance.
The Scottish government said that no new investment would be required for this temporary policy, as employers are already funded for the pension contributions they make to staff (see bit.ly/37pXJpC).
The UK health secretary, Matt Hancock, is understood to have issued a ministerial direction instructing NHS trusts in England to introduce an emergency plan involving use of the ‘scheme pays’ rules for annual allowance tax charges. Under the plan, tax bills incurred by doctors for this tax year only will be covered by the NHS pension scheme using mandatory ‘scheme pays’. However, while this would normally result in a reduced pension at retirement, the government is understood to have agreed to make good any reduced pension, without this resulting in an unauthorised payment charge on the individual.
In contrast to the approach in Scotland, the NHS England plan will be costly for the government.
