At the end of November, NHS England and the Department of Health and Social Care announced a temporary solution to the pensions tax problem that is causing clinicians to reduce their workloads. Clinical staff who elect to use the NHS Pension Scheme (NHSPS) “scheme pays” facility to settle an annual allowance tax charge arising in 2019/20 will receive a "commitment" that payments will be made outside of the NHSPS to restore the value of their pension benefits package.
We suggested then that the devil is likely to be in the detail.
A Government announcement has now provided a little more of that detail. In particular:
- affected clinicians will receive full details of the arrangement in individual letters being sent by their employer
- the clinicians must make a scheme pays election in relation to the tax charge for 2019/20 only relating to accrual in the NHSPS (and excluding 2019/20 AVCs) that is accepted by the NHS Business Service Authority
- the employer (or its successor) will be liable for the payment when clinicians take their pension with NHS England providing the funding to the employer (or its successor)
- if there is no employer, or other NHS body, to make the payment when it falls due (or the liability has been transferred to a NHS body which does not have sufficient assets to pay it), the Secretary of State will become responsible for the payment
- if clinicians are TUPE transferred outside the NHS, as part of the transfer process NHS England will make sure that the employer’s liability to make the payment is transferred or remains with an NHS body.
We will continue to monitor developments and keep you updated as more information about the arrangement is made available.