Paying an annual allowance tax charge . 53 0 obj <>/Encrypt 37 0 R/Filter/FlateDecode/ID[<27402B095C0D46798DBBD4B9B1F3923E><8DBA25CD0AB3B64EB7CE04F7C2F1B688>]/Index[36 33]/Info 35 0 R/Length 87/Prev 337744/Root 38 0 R/Size 69/Type/XRef/W[1 2 1]>>stream All forms and help sheets can be found on the HMRC website. 0 NHS Employers offers NHS organisations a comprehensive range of events, seminars and conferences to share best practice, get informed and network with colleagues. The annual allowance charge As we warned earlier, a charge is levied on the excess of pension contributions above the annual allowance. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. Staff affected by annual allowance can choose to pay their tax charge by using the scheme pays facility provided by the NHS Pension Scheme, carrying forward unused annual allowance from previous tax years, or by paying the tax charge from their own personal funds. This may prevent an annual allowance charge or reduce the amount due. Chris was liable for a tax charge on £9,289. Member – Calculate tax charge, inform HMRC and ensure the tax charge is paid. It is mandatory to procure user consent prior to running these cookies on your website. If you’re filing your tax return online, HMRC will automatically work out the amount of the Annual Allowance tax charge for you, based on your marginal rate of income tax. Rosie has an annual allowance charge on £44,791 for the 2019 to 2020 tax year (£71,791 – (£10,000 + £17,000)). Employees who do not usually need to complete a self-assessment tax return will need to register for the service. If there is enough leftover annual allowance to cover the charge in full, the employee will not need to take any further action. Great reasons to register with NHS Employers, NHS Terms and Conditions of Service Handbook, Very senior managers - SpHAs, ambulance trusts, Diversity and Inclusion Partners Programme, with benefits over the standard lifetime allowance*, who have incurred a tax charge of over £2,000. Our handy guide includes information for staff on how to pay an annual allowance tax charge. Employer – Provide accurate employee data to NHS Pensions, help answer any queries and signpost staff to independent financial adviser when necessary. Pension savings annual allowance calculators - introduction. PTM056130. If a member meets certain criteria, the scheme will pay this charge on their behalf if they ask them to. By signing and completing the nomination form you are confirming to the Trustee that you wish to use Scheme Pays to settle your Annual Allowance tax charge, and that your Plan will be reduced accordingly. This is called Scheme Pays. Alternatively, if the amount of your Annual Allowance tax charge is £2,000 or more and has resulted from an increase in your Plan benefits, you can ask the Trustee to pay the charge on your behalf from your benefits in the Plan. We have published a list of organisations that are able to offer expert guidance and advice on pension tax issues for members of the NHS Pension Scheme. We use cookies to give you the best experience on our website. For the tax year 2020/21 this amount is £40,000, however anyone with threshold income of over £200,000 and adjusted income of over £240,000 will get a reduced annual allowance. Share annual allowance (and scheme pays) deadlines with staff using our infographic. Your Annual Allowance for the 2019/20 tax year. Sue’s annual allowance tax charge is therefore £4,500 + £4,000 = £8,500. These cookies do not store any personal information.

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