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Annual Pension Returns

The backend of Winter is always a time for getting things ready for the year ahead. No more so than making sure all the annual NHS GP pension returns are up to date. Thankfully at Medics Money we don’t need to do this – but we work with some amazing accountants who do! What we can do is guide you through what needs doing to submit your GP Type 1 and Type 2 pension returns by who and what you can do to help. Get your pension record in shape for 2024 and it will also help with the McCloud remedy process

Partners in GP Practices

Every year you need to complete a Type 1 pension return. Usually, it’s your accountant that does this for you so you can probably sleep easier at night! A type 1 return reconciles your taxable profit from your accounts to your pensionable profit considering all sources of income. Its then submitted to PCSE or the SPPA for processing and they use this to update your pension record and to collect the right level of contributions. Simple. We wish it was!

So why does my pension record not get updated?

There can be all kinds of issues and here is how you can help with few:

    1. The most common issue is there is a difference between pension contributions recorded as paid at PCSE’s end from what was paid in the year – often due to post year-end adjustments they have made. It’s helpful if you can download an Employee Contribution Statement from PCSE online and send it to your accountant – see our YouTube video
    2. Problems with GP SOLO work (e.g. appraisal, out of hours) and locum records not tying in. Make sure your accountant again has access to your forms – but also as above the employee contribution statement will help if it shows locum and GP SOLO income
    3. Prior year returns not processed. If we had a £1 for everyone who raised this as an issue Team Medics’ Money would be on a beach in the Caribbean sipping cocktails! It’s an issue but accessing PCSE online can at least help you in identifying which ones haven’t been processed. Again, see our YouTube video for help
    4. Problems with new joiners not being added to PCSE’s system or partners moving from salaried roles and their status not being updated. You need to ensure you are correctly set up if you have joined or changed role in the year. Liaise with your practice manager.

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Salaried GPs

Salaried GPs must complete a Type 2 pension certificate. This summaries your pension income from all sources for two purposes:

  1. To declare your total pensionable income so that your pension record can be updated
  2. To make sure you have been paid contributions at the correct %.

Some things to watch for 2022/23

The pension rates changed on 1 October 2022

This means income needs splitting into two periods – particularly salaried GP income and GP SOLO income. Partnership income will normally be time apportioned although partners who have joined or left a practice in the year will need to take extra care.

It is essential that your accountant has your September 2022 and March 2023 payslip at minimum if you are a salaried GP. They will also need your GP SOLO form split between the two periods.

Annualisation

Everyone joined the 2015 pension scheme by default on 1 April 2022. This means that everyone is impacted by annualisation. This applies to people who did not work continuously – essentially. It means to work out the pension tier you must work out what they could have earned if they had worked all year. Why? We don’t know but it’s just what the legislation says you must do and can produce some odd results.

Pension Estimates

Finally practices also need to submit an estimate of pensionable income for all the partners and salaried GPs for 2024/25. You will need either a crystal ball or the help of a good accountant to do this or probably both. But if you don’t contributions being collected from April will be wrong. So, make sure your Practice Manager submits these on time.

However, some words of warning – you need to get your leavers and joiners registered correctly. If you don’t then pensions won’t be collected correctly, and it can leave issues of liabilities building up and more work down the line.

Using PCSE online

PCSE will encourage you to use PCSE online to submit forms. For the pension estimate it’s a really good idea as your Practice Manager should be able to do this easily if the leavers and joiners are right.

The online portal is also the way you can add leavers and joiners but that needs both the individual to do part of the process as well – not just the practice. For non-GP partners it’s also a bit trickier!

Type 1 and Type 2 forms – your accountant is unlikely to be able to do this for you and will suggest you upload the form to PCSE’s portal. There is good reason for this as manually inputting all their client forms takes a lot of time and cost you won’t want to pay! You can try taking their data and entering it online yourself but just take care to make sure everything matches including the contributions already paid or you could end up with the wrong pensionable profits or amount being collected. PCSE’s records are not always 100% right!

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