Article relevant to the tax year 2018/19
Are you contributing towards the NHS pension?
Are you aware that your payroll department may be making mistakes?
Before we go into the details of why we believe that errors are being made we first need to understand some basics. There are two tiers for the purposes of pension contributions. This has been outlined by the NHS in their NHS Pensions A basic administration guide for General Practitioners guide – Click Here. There were several changes that have been made to the NHS pension for the 1998/2015 scheme. You can read more about these changes in our other article.
Type 1: Principal/Partners
A GP Principal/Partner can be involved in several primary care contracts (i.e. be a Partner in several Practices) and must pension all of their eligible income by completing an annual certificate of pensionable profits for each contract they are involved with.
Even though medical Practitioners are self-employed contractors and do not have an employer as such for pension purposes their employer is always Primary Care Support England (PCSE) on behalf of NHS England or the Local Health Board (LHB) not the Practice.
Type 2: Salaried/Assistants/Portfolio
A salaried and assistant GP works in a GP practice and will either be an employee of the Practice or working on a long-term fee basis. This is usually longer than six months. They also wish to be considered as a Type 2 practitioner.
The GP will either be an employee of the Practice and paid via payroll, or fee-based. However, the employer will be PCSE or the LHB. SOLO forms must not be completed for this work. More can be understood about SOLO forms here. This form must be completed and sent to PCSE, the delegated CCG or the LHB.
A portfolio GP is generally a GP who does a variety of GP based jobs. This could be because they work in different GPs, hospitals or have their own clinic. Fee-based GPs that do not work from a practice is also classed as assistants (Type 2).
This includes Out of Hours (OOH), GP with special interests (GPwSI), appraisals, board membership etc. Members that would rather be regarded as a Locum then the member must continue to complete Locum forms A and B.
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NHS payroll & Pension contributions processes for GPs
All Practices are required to complete and submit the Estimate of GP (and non-GP) Providers NHS Pensionable Profits /Pay form to PCSE by 1 March for the upcoming pension year. So, for 2018/19 you would be expected to complete the forms by no later than 1st March 2018. This estimate form will then allow PCSE to calculate the correct contribution rate and deduct the relevant contributions from the practice via top-slicing.
All Type 1 Practitioners must complete and submit a GP (and non-GP) Providers Annual Certificate of Pensionable Profits form. Type 2 Practitioners must complete and submit a Type 2 Medical Practitioner self-assessment form of tiered contributions. This will then allow PCSE to assess the GP’s pensionable profit from the previous year.
The deadline for completion of this certificate is 28th / 29th February of the following pension year. For the year 2016/17, the certificate had to be submitted to PCSE/LHB by 28 February 2018. If Type 1 Practitioner’s also carried out Type 2 work then the Type 2 Medical Practitioner self-assessment form must also be completed.
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NHS payroll & Pension contributions processes for Non-GPs
Non-GP Providers/Partners (NGPPPs) are afforded whole time officer (not Practitioner) status. They are self-employed contractors and for pension purposes, their employer is always PCSE/Local Health Board.
NGPPPs must be included within the Estimate of pensionable pay form that is submitted to PCSE each year. They must also complete and submit the annual certificate of pensionable profits to PCSE within the deadline dates. If they are a party to several qualifying contracts they are only able to pension income from one contract. They may choose the contract that has the most benefit.
NGPPPs pension contributions are deducted by PCSE/Local Health Board based on the estimate of pensionable pay form.
NHS payroll & Pension contributions processes for locums
Locum GPs must use Locum form A and form B to declare their pensionable earnings. The Practice must pay the 14.3% employers contributions and 0.08% administration levy directly to the GP Locum. More information and guidance of completing these forms may be read here.
In order to superannuate their income as a GP Locum they must:
- be on a medical performers list and working as an individual
- deputise, or providing additional cover, in a GP Practice on a temporary basis (less than six months)
- perform appraisal work on a fee basis.
- send both Locum forms A and B to PCSE/LHB within the 10-week window.
Locum Form A must be submitted by the GP to the Practice as soon as possible following the work being carried out and Locum form B is used as a monthly record of all Locum work payments and the GP Locum must submit this no more than 10 weeks from the first date worked. Forms submitted
after the 10-week deadline cannot be accepted unless there are exceptional circumstances.
Administration of pension record
As Practitioners and NGPPPs do not have employers for pension purposes. PCSE, the LHB or NHS Dental Services, are classed as the Practitioner and NGPPPs Employing Authority (EA) and administer the pension records for Practitioners.
Once a new GP Practitioner joins a Practice the relevant EA must be made aware. They will then estimate the GP and NGPPPs NHS Pensionable Profits/Pay and then complete and submit the necessary forms. A pensionable post must not be set up by the Practice.
If a Practitioner wishes to opt out of the Pension Scheme then he/she must opt out of all Practitioner posts. If a Practitioner has an Officer post as well as a Practitioner post then they can opt out of the Officer post whilst continuing to contribute to the Practitioner post and vice versa.
Errors of NHS pension contributions calculations
If the NHS Pensionable Profits /Pay form is not received by PCSE then contributions will be taken at the highest tiered rate until the form has been submitted. This could mean that the pension contributions may be under or overestimated. This could provide doctors and locums with all sorts of issues.
Is the NHS pension really worth it
We have written another article, which we think is worth a good read. It talks about the NHS pension and whether or not it provides you with a good return of the money you put in. We also talk about some of the tax breaks that must be taken into account when making contributions.
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