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Anyone with NHS doctor clients? pension query.

NHS pension and annual allowance

NHS doctor client has sent me 2 annual statements from NHS pension schemes. One is the 2015 scheme (call it A)and the other is the 1995/2008 scheme (B). The 16/17 pension input period for A shows an opening value of £16K and closing value of £39K. Scheme B shows opening value £81K and closing value £99K.

I have therefore calculated the total increase in value £41K, which exceeds the allowance of £40K for the year. This seems high, his P60 shows taxable gross £71K for 16/17.

Before I tell him he has £400 tax to pay as he has exceeded the maximum annual allowance, can any one confirm that I have done the right calculations? Namely- Increase in value of each pension, added together, then deduct annual allowance, tax due on excess at highest income tax rate?

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By John R
17th Oct 2017 12:12

Have you considered whether there is any unused relief from the three previous years?
The salary for 2016-17 is not an indicator except to the extent that it has increased over the previous year. It is the increase in pension entitlement in excess of CPI that determines the pension inputs. Unfortunately, the CPI for that year was 0% so more people are being affected in 2016-17 than in previous periods.

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By SteveRA
17th Oct 2017 13:01

Thank you very much, there is definitely some unused allowance available from previous years, and not much is needed so we should be ok.

Sometimes it is easy to overlook the obvious when faced with a new problem. None of my clients have come close to breaching the annual limit before!

The statement shows the exact info you are referring to regarding cpi and I appreciate your time in replying. Saved me looking silly!

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