Steven Jones MCIM
Business Development Partner, Ballards LLP

As a Tax adviser within the medical sector dealing with the financial implications surrounding the NHS Pension scheme, Peter Herniman is aware of the minefield that is the Annual and Lifetime Allowance and how this impacts those in the medical profession.

2019/20 Annual Allowance

2019/20 was a unique year for clinicians working within the NHS Pension scheme whereby NHS England have agreed to settle any Annual Allowance charge incurred for the year, dependent on certain conditions being met.

Scheme Pays Election

You will no doubt be aware of the importance of establishing any applicable tax charges arising as a result of the Annual Allowance charge for 2019/20 following the introduction of a tapered Annual Allowance in 2016/17.


Under the current NHS Pension Scheme rules, if an Annual Allowance charge applies, it is possible to make an election to the scheme to pay the tax charge on behalf of the individual. However, this must be received by NHS Pensions by HMRC’s mandatory Scheme Pays deadline.

There is however a problem in that the deadline for filing a mandatory election in respect of 2019/20 was 31 July 2021 (this is where NHS Pensions must agree to a members request to pay any charge in excess of the standard Annual Allowance). The deadline for a voluntary election (where a member can ask for any amount of excess charge to be paid by the scheme) has been extended from the original deadline of 31 July 2021 to 31 March 2022.

Compensation Policy Form

You should also be aware that government made a commitment to settle the Annual Allowance tax charges in full for eligible clinicians within the NHS pension scheme for 2019/20. Therefore, any charge dealt with via a Scheme Pays Election for the year will be settled by NHS England upon the submission of the relevant compensation claim. The deadline for filing such a claim is also 31 March 2022.

Therefore, if you have not already signed and returned these documents, time is beginning to run out!!

Action only needs to be taken if:

• You were an active member of the NHS Pension scheme during 2019/20.
• You have not already submitted a compensation form/protective election to PCSE/NHS Pensions

If you have yet to file any election or claim and have not received in order to calculate any charge, filing a protective election and claim is strongly advised.

If you would like to discuss any issues raised in this article or any other accountancy or taxation matters, please feel free to contact Peter Herniman on: 01905 794 504 or email for a discussion at no cost nor obligation.