Medical News
Spring 2022

Welcome to our Spring 2022 Medical News

In this issue

Spring Statement 2022

Tax Data Card 2022/23

NHS Pension – age discrimination remedy

Extension of NHS Pension retire and return easements

New PPE portal

CQC fees for 2022-23

Health & Social Care tax levy and taxation of dividends

Spring Statement 2022

Chancellor Rishi Sunak presented his Spring Statement on Wednesday 23 March. Our Spring Statement Summary covers the main issues that are most likely to be of interest to you. You will also find useful commentaries to help you understand how the proposed changes may affect you personally.

Highlights

Increase in the National Insurance threshold and Lower Profit Limit

Chancellor Rishi Sunak announced an increase in the annual National Insurance Primary Threshold and the Lower Profits Limit in his 2022 Spring Statement.

Primary Class 1 contributions are paid by employees. To align the starting thresholds for income tax and National Insurance contributions (NICs) the threshold will increase from 6 July 2022 from £9,880 to £12,570.

The Lower Profits Limit is the point where the profits of the self-employed become subject to Class 4 NICs. From 6 April 2022 the Lower Profits Limit is increased to £11,908 and from 6 April 2023 the limit is increased further to £12,570.

In addition, there will be no Class 2 NICs on profits between £6,725 and £11,908. £3.15 per week is payable where profits are over £11,908.

Temporary increase in National Insurance rates

From April 2022, there will be a temporary increase in the rates of NICs payable for employees, employers and the self-employed as a transitional provision in readiness for the introduction of the Health and Social Care Levy from April 2023.

With the increase to the thresholds announced in the Spring Statement, from 6 July 2022 employees earning between £242 (£190 from 6 April to 5 July 2022) and £967 per week will pay NICs at 13.25%. Earnings over £967 will attract a 3.25% charge. Employers will pay 15.05% on their employees’ earnings over £175 per week.

Although employees’ NICs only become payable once earnings exceed £242 per week, any earnings between £123 and £242 per week protect an entitlement to basic state retirement benefits without incurring a liability to NICs.

For the self-employed, where their profits exceed £11,908 per annum, they will pay 10.25% on the profits up to £50,270 and 3.25% on profits over that upper profits limit.

Income tax reduction

The Chancellor announced the reduction in the basic rate of income tax for non-savings, non-dividend income for taxpayers in England, Wales and Northern Ireland to 19% from April 2024. This reduction will not apply for Scottish taxpayers because the power to set these rates is devolved to the Scottish Government.

The change will be implemented in a future Finance Bill.

Increased Employment Allowance

Employers are able to claim the Employment Allowance which reduces their employer Class 1 NICs each year.

In the Spring Statement, the Chancellor announced an increase from April 2022 of £1,000 for eligible employers to reduce their employer NICs by up to £5,000 per year.

The allowance can be claimed against only one PAYE scheme, even if the business runs multiple schemes. Connected businesses, such as companies under the control of the same person or persons, are only entitled to one Employment Allowance between them.

Please note that surgeries are not  eligible to claim Employment Allowance if they are  carrying out more than 50% of their work in the public sector. For example, providing NHS services/General Practitioner services.

In addition, we have included a detailed calendar of the most important dates for 2022/23 that will help you with tax planning ahead of time. If you have any questions concerning the issues covered in this summary or would like advice on the best possible course of action in a particular area, please do not hesitate to contact us.

Spring Statement Summary

Tax Data Card 2022/23

A copy of our 2022/23 Tax Rates Card, which summarises many of the rates and allowances fundamental to our business and personal lives is available to download here. We are sure that you will find it a useful point of reference throughout the coming tax year.

Our tax card contains information on income tax rates. It also includes information on devolved property taxes as well as business, employment and capital taxes.

Some key recent changes include:

  • increased personal allowances and tax bands
  • increases in the national insurance thresholds and rates
  • increased dividend tax rates
  • updated car benefit percentages
  • extension of the Annual Investment Allowance
  • revised property taxes.

Our tax card is intended for use as a quick point of reference. Should you require any further information, have a simple question or require detailed advice, please do not hesitate to contact us.

NHS Pension – age discrimination remedy

Government changes to remove age discrimination from public service pension schemes (including the NHS Pension Scheme) are now underway, following the McCloud judgement made by the Court of Appeal.

Back in 2015, the government introduced changes to the majority of public service schemes with the changes excluding members which were closer to the retirement age. The pension changes mainly affected members who were in the 1995/2008 NHS Pension Scheme before 31 March 2012 and were transferred into the 2015 NHS Pension Scheme on or after 1 April 2015. The 2015 pension scheme which was seen by many as less attractive, had a retirement date of up to eight years longer than the previous 1995/2008 scheme and subsequently, doctors who were approaching retirement were entitled to carry on in the previous scheme for longer.

The Court of Appeal’s judgement found that the safeguards instilled to protect pension benefits of older members discriminated against younger members of the scheme

If you have joined the NHS Pension scheme after 31 March 2012, you are not affected. For those who were members prior to 31 March 2012, measures will be taken to ensure appropriate redress.

Remedy action

From February 2022, NHS Pensions will be contacting affected members by post to ask members to consider and opt to receive either legacy scheme (1995/2008) or reform scheme (2015) pension benefits for pensionable service between 1 April 2015 and 31 March 2022.

Members who will be contacted first include those members who have already retired, beneficiaries of members who are deceased or members that are planning to retire before 1 October 2023. Once a decision has been made, NHS Pensions will retrospectively apply your choice. Any monies owed to you will be backdated to your retirement date.

Impact on previous excess pension tax charges

It is important to note that any retrospective adjustments applied by NHS Pensions are likely to ultimately impact on member’s tax liabilities.

Pension input figures will be reassessed by NHS Pensions during the remedy period of 1 April 2015 and 31 March 2022, once a member has made their choice. Their respective Pension Annual allowance positions for the 2015/16 to 2020/21 tax years will need to be recalculated and reassessed to establish whether potential excess pension tax charges arise and whether further tax is either payable or repayable as a result of the adjustment. We will be able to calculate and advise members of any amendments to annual allowance tax charges for the above tax years.

If a member has settled an excess annual allowance tax charge via a scheme pays election, the election will need to be modified for the new excess pension tax charge in order to avoid overpaying.

Pension Scheme changes going forward

From 1 April 2022, all active members will be members of the 2015 NHS Pension Scheme and the 1995/2008 NHS Pension Scheme will be closed. Members will not lose any of the pension benefits accrued in the 1995/2008 scheme and benefits going forward will be calculated under the 2015 scheme.

Further information can be found by clicking on the following link:- Changes to public service pensions | NHSBSA

We strongly advise that you take independent pension advice should the above be relevant to you.

Extension of NHS Pension retire and return easements

Temporary suspension of restrictions on return to work which were implemented to NHS Pension Scheme regulations following COVID will continue to 31 October 2022.

These amendments were introduced to ease retire and return restrictions. Retired and semi-retired individuals were able to return to the NHS or increase their working commitments without having their pension benefits suspended or reduced.

These were due to expire on 24 March 2022 but The Department of Health and Social Care have since agreed a further extension to 31 October 2022.

Affected members who had recently retired and returned to work or those who had chosen to draw down part of their benefits will be contacted by NHS over the summer and will provide details of the earnings margin (annual amount that members are able to earn in NHS employment without it affecting the amount of pension that they are paid) by 1 November 2022.

Further information can be found by accessing the NHS link below
COVID-19 guidance on support for retired members | NHSBSA

New PPE portal

The Department of Health and Social Care (DHSC) have implemented a new PPE portal for Community Health Providers to provide continued access to free PPE required as a direct result of COVID-19. Eligible users will be able to claim PPE for this sole requirement until 31 March 2023.

Any PPE for non-COVID 19 requirements should be purchased through normal channels.

Users will be informed and will receive an invite to migrate across to the new portal.

Eligible GPs can order weekly PPE quantities, based on the number of registered patients.

Once activated, you can log in and place a weekly order for PPE which will be delivered to the registered user’s address.

CQC fees for 2022-23

The Care Quality Commission (CQC) have announced that fees will not change from 1 April 2022 for registered providers on the basis that the provider’s registration or size has not changed.

Please visit their website for further details using the link below:-
Fees (cqc.org.uk)

Health & Social Care tax levy and taxation of dividends

From 6 April 2022, there will be a 1.25% increase in the rate of tax payable on dividends received by those who own shares in companies. The dividend tax increase has been introduced to provide additional funding towards social care costs. This means that after the £2,000 tax free dividend allowance the rate of tax for the 2022/23 tax year will be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for those with income in excess of £150,000 a year. This will catch many family company director/shareholders who traditionally “pay” themselves by taking a low salary and larger dividends to minimise NICs.

Please do contact us to discuss how to best structure your remuneration in a tax efficient manner.