The background to the McCloud Rectification is summarised here. In summary, the McCloud rectification is about placing individuals back into their legacy pension schemes covering the period from April 2015 to April 2022. This was done because the transition of some individuals to the 2015 scheme was deemed illegal.
The annual allowance tax charge is one which arises when the deemed growth in your NHS pension benefits (and other pension contributions outside of the scheme) exceeded the allowance set by the government. How this allowance was set also changed over the remedy period so each year may have a different calculation.
What is a Remedial Pension Savings Statement (RPSS)?
Each NHS pension scheme should issue an RPSS to doctors impacted by the annual allowance over this period. This sets out a revised calculation of the pension growth over the period with amounts to assess an unused allowance from preceding years. You then need to perform a triage process to ascertain if you have to submit a full set of data to HMRC.
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Will everyone get a tax refund?
No. Whilst many will, there will be a cohort of people where the growth has gone up over this period due to the different ways the pension is calculated for the legacy 1995 and 2008 schemes and the 2015 scheme.
In addition, the process also covers the year 2022-23 as no disclosure on tax returns was needed for that tax year. So, you may have no adjustment for 2015 to 2022, but a charge for 2022-23 which would result in more tax being due.
Either way though, correcting it is a requirement of the law, so it needs to be done.
Missing statements
Issues have prevailed with many still not having received missing statements. More are now coming through including those who need a manual calculation. But as a result of the issues that arose deadlines have been pushed back. The revised deadlines are below. Current Active members now have a deadline of 1 September 2025 to receive their statements:
| Member class | Deadline |
|---|---|
| Retired by 1 October 2023 – formerly unprotected and only legacy benefits in payment | 1 July 2025 |
| Retired by 1 October 2023 – formerly taper protected and only legacy benefits in payment | 1 July 2025 |
| Retired by 1 October 2023 – formerly unprotected and both legacy and reform benefits in payment | 1 October 2025 |
| Retired by 1 October 2023 – formerly taper protected and both legacy and reform benefits in payment | 1 October 2025 |
| Retired by 1 October 2023 – formerly protected and benefits in payment for remedy period | 1 December 2026 |
| Retired between 1 October 2023 and 1 July 2025 | 1 December 2026 |
| Active | 1 September 2025 |
| Deferred | 1 September 2025 |
NHSBSA have also issued a new notification tool to allow people to self-identify where they have not received an RPSS:
If you have not received an RPSS statement AND:
- You have had an annual allowance tax over the period 1 April 2015 to 31 March 2022, AND
- You did not get the scheme to pay tax for you over that period (i.e you paid it yourself via self-assessment or maybe via a SIPP)
then NHSBSA are now asking people to self-identify using the link below:
Resubmitting incorrect statements
If you received an incorrect statement which then gets amended, you will need to resubmit the information to HMRC. If you use an agent to do this then it’s worth remembering that the compensation available of £1,000 is for each submission so you can continue to get help where needed.
NHS Pension McCloud Illustrator
NHSBSA have issued a benefits illustrator tool which shows the options at retirement under McCloud. It doesn’t work for GPs though, and care must be taken with the data inputs, but it gives an idea of the difference between the options at retirement.
Contingent decisions
If you had previously opted out of the scheme at anytime between April 2015 and March 2022 you will be able to apply to reinstate the pensionable service for all or part of the period. This will require you to repay pension contributions and interest will be applied as these are being paid later than they were due. For more information see: https://www.medicsmoney.co.uk/nhs-pensions-mccloud-remedy-contingent-decisions-opting-out-and-additional-benefits/ NHSBSA has provided an opt out indicative calculator covering England, Wales and Scotland as well as a form for a more detailed quote – see the opt out section at:
https://www.nhsbsa.nhs.uk/public-service-pensions-remedy-mccloud/contingent-decisions
A separate application for is included on the SPPA website for Scotland:
https://pensions.gov.scot/nhs/nhs-remedy-hub/nhs-remedy-contingent-decision
Further information is available in Northern Ireland:
https://hscpensions.hscni.net/hsc-pension-scheme/mccloud-ruling-hsc/contingent-decisions/
Understanding the investment return together with the impact of taxation is complicated and it may be that you need to consult an Independent Financial Advisor to model the scenarios as this will result in possible annual allowance tax charges for some of the years.
The number of processed forms remains lower than anticipated
Worryingly the latest Freedom on Information requests show that the amount of tax claims being processed compared with expected numbers are low and HMRC turnaround time is increasing. This could be for a variety of reasons be it non receipt of an RPSS from the relevant pension agency or, more worryingly, failure to act on behalf of the doctor. HMRC though are now taking several months to process claims.
If you do receive an RPSS then doing nothing is not an option! Act now and use the compensation available to get professional advice if you need to:
https://www.medicsmoney.co.uk/mccloud-compensation-payout-should-i-consult-an-advisor/
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