Dr Tony Goldstone Profile picture
Sep 17, 2022 26 tweets 11 min read Read on X
1/ A thread about annual allowance in 21/22👇 [+ new free tool]

Many will have received a nasty brown envelope from @nhs_pensions this week. If you have (and even if you haven't) you may need to take action. Pay attention and share (please RT) with colleagues who may need this!
2/ OK if you already have statements for 21/22 (& if you are member of two schemes i.e. 1995 & 2015 you need TWO statements) you can miss this step.

But if you are a high earner (say >£90k) & you haven't, request one today (it can take 3 months)

bit.ly/TGPSSRequest22
3/ Next you need to establish if you have an AA liability in 21/22. To do that you can use the free HMRC calculator. Its not that straightforward, but I would *strongly* advise to do your own calculations, even if you have an accountant/advisor.
4/ You can watch my video here. I did it for the 18/19 tax year, but its similar for the 21/22 tax year (see next tweets for differences) and I have updated the accompanying spreadsheet

5/ Ive updated the tool for the new 21/22 year

Download it here:
bit.ly/TGAAHelper2122

Basically fill in the grey cells with your pension growth (as per statements) & your total taxable income (from all sources) and it will give output in the yellow cells
6/ You can access the HMRC calculator here:

tax.service.gov.uk/pension-annual…

As per the video above, & as per the HMRC instruction- tick years in which you were a member.

I would always tick *at least* 7 years prior to the current year, so you may need to get this data from the scheme
7/ Ive added a section on the spreadsheet to make it easier to use the "check your answers" section on the HMRC calculator (left) with a copy of the data you have entered (right) to check its the same
8/ When you get to the calculation results of the HMRC calculator (which looks a bit different to the earlier version from the video) note the "available annual allowance" - which includes any carry forward you might have and/or tapering, and put it the highlighed red cell
9/ As a further check the highlighed blue cell should be the same as the HMRC calculator "amount on which tax is due" (excl. any private pension) - this section will also show you any required split should you need to use "scheme pays"
10/ As noted in the video, DON'T assume if you haven't received an envelope = no AA charge. The scheme dont know if you are "tapered" (i.e. your taxable income was over £110k to 19/20, or £200k after 20/21, so available allowance maybe as small as £10k (£4k from 20/21)
11/ Similarly you might not have received one because your employer / (or PCSE / @CapitaPlc) have not updated the pension agency. So if you haven't received a PSS, request one today using that template above
12/ Following an extensive @BMA_Pensions campaign, the taper changed from 20/21

From that tax year going forward (but not 16/17 to 19/20)

✅ Threshold income ⬆️ to 200k (previous 110k)
✅ Adjusted income ⬆️ to 240k (previous 150k)
❌ Min AA ⬇️ to 4k from 10k
13/ These changes take many doctors out of tapering (unless total income >£200k) but doesn't change the general AA (£40k) so many still affected

The new free tool

bit.ly/TGAAHelper2122

will apply the old limits to 19/20 (blue), & the new limits from 20/21 (green)
14/ OK so now, having watched the video, and used the tool / HMRC calculator, you should know if you have an AA charge for 21/22

Unlike 19/20 there is not a "compensation scheme" for clinicians (in England & Wales), so if there is a charge it needs to be paid (or scheme pays)
15/ Many of you will be aware of the ongoing "age discrimination" or "McCloud" case. Im not going to go over it here (if you want to see threads in my pinned tweet).

Basically (after October 2023), this tax year will need to be recalculated as if you were in your "legacy" scheme
16/ For now I would advise you to largely ignore this. For tax year 21/22 you can only work out your position based on the data provided by the scheme which will currently ignore the McCloud case (as per the scheme's instructions) from @hmtreasury
17/ *However* McCloud may affect your decision *how* to pay any AA charge for 21/22

For most clinicians and other high earners in the NHS, if you have an AA charge for 21/22 it will go down (or dissapear) when you "go back" to legacy only schemes in 2023
18/ The main exceptions to this will be

i) pyschs with MHO status who can get "double years" back with McCloud so their AA charges may go up.

ii) people who came out of the scheme and may be able to retrospectively go back in under "contingent decision" on a case by case basis
19/ So please don't ignore your 21/22 AA tax liability because of the McCloud legal case - even if you think your AA tax charge may disappear if you revert to the old schemes.

It REMAINS unclear what will happen with AA if you choose to come back into 2015 schemes at retirement
20/ With any AA charge you have basically two choices

i) Pay the charge with your self assessment from cash (from taxed income)
ii) Pay the charge using a "scheme pays loan"

I've covered applying for scheme pays before in this video (for 19/20)
21/ Because of McCloud & the fact your charge may go down/dissapear in 2023 (although UNCERTAIN what will happen if you choose 2015 for the remedy period at retirement) I suspect more people will be inclined to use "scheme pays" this tax year as the loan amount can be changed
22/ In summary - no-one is going to magically send you a bill for your AA charge

YOU need to request a savings statement if you dont have one.
YOU need to calculate if you have a charge.
YOU need to tell HMRC you have a charge.
YOU need to pay the charge or use "scheme pays"
23/ Penultimately 21/22 may be first or biggest AA charge. 2 factors for this - a bigger than normal difference between inflation Sep 20 (0.5%) & Sep 21 (3.1%), & similarly with the pay "award" (cut)

But current tax year (22/23) will be MUCH worse #CPIdisconnect
24/ Finally I can't in good conscience do a thread about AA without saying what a thouroughly stupid tax this is. It's a completely inappropriate tax in the context of a DB scheme.

Tax relief is removed by steep tiering, & removed again by AA, again by LTA = pension theft
25/ Can't emphasize enough how important this is- *EVEN IF HAVE WRITTEN RECENTLY*

New PM, new chancellor, & a new SOS - your MP needs to know how its affecting YOU / YOUR SERVICE / YOUR RETIREMENT PLANS

Please take 5 mins - and take time to customise it
26/ Clinicians are dealing with unprecented pressures, & really shouldn't be dealing with this complex & unfair tax. Do the right thing @theresecoffey @KwasiKwarteng & talk to @BMA_Pensions about #FixTheFinanceAct & #TaxUnregistered like judges.
Please RT/share with colleagues

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More from @goldstone_tony

Dec 12
1/ THOUGHT FOR THE DAY: Whilst I'm grateful for the changes to LTA/AA, the AA and the dreaded #taper still remain. And here's your regular reminder why its PARTICULARLY unfair, and stupid, in the NHS (from @BMA_Pensions @TheBMA evidence to DDRB).

Short 🧵pls read & share Image
2/ We are all in CARE now, so should all be paying generally the same employEE contributions.

But we aren't - and its worst - by a garden mile - in the NHS per this chart showing the ratio of conts from the highest earners : lowest earners in the public sector 👇Image
3/ So unlike in the private sector where there is no difference in cost for higher vs lower owners other than tax relief, we go through this ridiculously unfair step in the NHS - far worse than anywhere in the public sector - that strips away our higher rate reliefImage
Read 5 tweets
Dec 10
1/ very important and NEW: @nhs_pensions have overnight issues guidance on 23/24 tax year where they have failed to send you a pensions savings statement on time (which was their legal duty)

nhsbsa.nhs.uk/public-service…Image
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2/ the bottom line is they expect you ESTIMATE your carry forward and PIA and any charge in the normal timescale ie by Jan 31st 2025 …. Which is going to be extremely difficult ….. Image
Image
3/ after you estimate you will have until Jan 26 to correct your estimation based on the real figures Image
Image
Read 13 tweets
Oct 30
1/ Well after intense media speculation re: budget (speculation incl. reduction of tax free lump sum to £100k; flat rate relief at 30 or 20%; lifetime allowance re-introduction & pension "flexibility" [i.e. balance between pay & pension] .. speculation can now END....
Pls RT 🧵 Image
2/ Its now time for @RachelReevesMP to deliver her first budget ... I'll be live tweeting anything significant with a focus on #pensions and #pensiontax (if there is indeed anything!)

So keep following! Appologies for any typos/errors read to end for any corrections & docs Image
3/ So following #PMQs there is a statement that the contents of some of the budget has been made public before the budget and expresses dissapointment that this has happened Image
Read 27 tweets
Oct 17
1/ Longtime followers may remember this update from 4.5 years ago. Id met the then head of @nhs_pensions and the senior leadership team. They made lots of promises to improve things around Annual Allowance that BADLY needed improvement....

Pls read, share and RT
2/ Chief among those promises was to have an end to waiting till October for a PSS. Indeed no more brown envelopes. 85% of people would get their "digital brown envelope" by June (starting in 2020) 👇

3/ And furthermore for those that dont get automatic PSS (then around 85%), 15% would be able to see in this portal, from June 2020 why they DONT have a PSS i.e. you need manual calculations, or they cant issue one as they are awaiting info from employer

Read 14 tweets
Sep 7
1/ ICYMI Ive done a couple of videos 📹 on the tapered annual allowance - and why it could be hugely problematic for higher earners in the NHS *THIS* tax year (24/25)

Its crucial you have an understanding of chart 👇 if you are in affected groups.

Please share 👇/ RT & 👀📹 Image
2/ This was the first of two videos introducing the problem via a real case study

I discuss why its crucial that @wesstreeting @jamesmurray_ldn get an urgent grip of the dreadful tax policies they inherited affecting lower and higher earning consultants

3/ In second video I discuss a case in more detail & look at some strategies to try & mitigate this nightmare tax cliff.

None are desirable & tax needs changing to remove the huge discincentives to not to extra work, or worse still, reduce current

Read 4 tweets
Aug 20
THOUGHT FOR THE DAY: many senior doctors desperate to help waiting lists & would be willing to give up evenings/weekends to help out.

But current tax rules will mean some could end up #PayingToWork 👇

RT if you want @wesstreeting @jamesmurray_ldn to fix this ludicrous tax trap Image
2/ Per the chart with taxable income 242,400 after income tax, NI and AA post tax pay is around 95,056.40

However the same member earning 199,999 also gets 95,083.88 post income tax, NI, and AA

Why would this member do over £40k extra work, and PAY TO WORK?? Image
3/ Looking at it the other way the member earning 200,001 takes home 72,584.96

But the member earning 157,500 takes home essentially the same 72,559.40

*HOW IS THIS FAIR*

[CLUE: it isnt] Image
Read 6 tweets

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