March 2016 Issue 79
www.independent-practitioner-today.co.uk
INDEPENDENT PRACTITIONER TODAY
The business journal for doctors in private practice
In this issue
Proof that it works
The register of verified practitioners of non-surgical cosmetic care is going through a face-lift P10
Together is better
A new series examines key issues facing consultants as they build their practice P22
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Free tax guide www.independen
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T INDEPENDEN ER PRACTITION TODAY
al for The business journ e practice doctors in privat
’s guide to
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A private doctor
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By Vanessa Sande
Available on our website
Sloping off to the Alps?
Have you ever wanted a home near a ski slope? We look at this year’s best buys P40
Bonuses trigger tax hit By Robin Stride
Independent practitioners who recently received an NHS Clinical Excellence Award (CEA) have been shocked to discover the reward could land them with a substantial tax burden. This is because any increase in pensionable pay may force them to unwittingly breach the annual allowance rate – which is the total amount which can be paid into a pension each year before attracting a tax charge. The annual allowance was chopped to just £40,000 a year in April 2014 and advisers are warning that most senior doctors will find they will breach this rate by the yearly rise in NHS Pension benefits alone, before even considering the impact of private pension contributions. And things will only get worse next month for many hundreds of higher-income doctors with a private practice. From April 2016, individuals earning over £150,000 will see their annual allowance reduced even more. It will drop by £1 for every £2 of income with a maximum reduction of £30,000 for those earning £210,000 or more. Consultants heard of the CEA bombshell at Independent Practi tioner Today’s pay and pensions seminar last month, hosted by the Royal Society of Medicine. In association with
Peak practice: A new day has dawned for 194 London Bridge Hospital consultants, and 32 from The Portland Hospital, who now have consulting room views like this at HCA’s new outpatients and diagnostics centre on three floors of The Shard
Simon Bruce, managing director of financial advisers Cavend ish Medical, explained later: ‘The Clinical Excellence Award is a worthy reward for an outstanding contribution to the profession. However, you might be disappointed to hear that your achievement could mean paying significantly more tax. ‘Your new CEA will be backdated to April 2015. Unfortunately, this means you may only find out if you are liable for a tax charge long after your tax records for 2015-16 have been submitted. ‘The NHS Pensions Agency will probably not write to those breach-
ing the annual allowance cap until this autumn – and, sadly, little can then be done retrospectively.’ Cavendish Medical has been receiving a steady stream of inquiries from senior doctors who are worried about their position. There were 318 new CEA awards in 2015 and 319 the year before. Nearly everyone with a national award and private practice earnings is likely to be affected, although Cavendish said this depended on many factors. Mr Bruce told Independent Practi Xxxxx tioner Today: ‘It may be possible to use your allowances from the last three years – known as “carry for-
ward” – but the exact financial position and the implications for your tax status can only be ascertained with detailed analysis. ‘If you are not confident of your own position, you should seek help without delay. Remember, the onus will be on the individual to notify HM Revenue and Customs if you are liable for a tax charge.’ BMA private practice committee chairman Mr Derek Machin said: ‘The recent changes in NHS pensions and the Government’s ongoing meddling with lifetime allowances, annual allowances and tax relief on pensions is causing problems to many doctors.’