Bulletin 19.10.2010

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Bulletin 19.10.2010

Tax Relief on Pensions, update on changes

Following the publication in July of the discussion document entitled “Restriction of pensions tax relief: a discussion document on the alternative approach”, the Government has now announced the changes that will take place for restricting pensions tax relief. The main points are:

  1. Annual Allowance reduced from £255,000 to £50,000 from April 2011.
  2. Lifetime allowance (LTA) reduced from £1.8 million to £1.5 million from April 2012.
  3. Deemed contributions to defined benefit schemes calculated using a simple “flat factor” method set at 16.
  4. Proposal that unused allowance from up to three previous years will be carried forward to offset against the excess contribution.

Further details on how the Annual Allowance test would apply on cases of ill-health have not been fully concluded yet, but it has been confirmed that exemptions will not be granted in cases of redundancy.

The Government has also announced that it will consult on options to give individuals and schemes more flexibility over the payment of these charges in November 2010, for cases where the tax charges incurred are unmanageable from current income. The Treasury’s paper, which includes a summary of the responses to the previous discussion document, can be read here.

The BMA, named in the list of respondents in Annex D.1 of the paper, are pleased to note that the original proposals have been toned down considerably and that relief has been granted to members who receive ‘spikes’ in pay. As suggested in the BMA response, unused annual allowance will now be able to be carried forward for up to three tax years which would mean that a Specialist Registrar, on qualifying as a Consultant, would in the vast majority of cases no longer face a tax charge of up to £25,000.

Even the highest earners in the NHS Pension Scheme are likely to avoid tax charges. The document confirms that the valuation factor for annual increases to pension against the Annual Allowance will be 16:1. This means that as long as an individual’s pension accrual doesn’t increase by more than £3,125 (£50,000 divided by 16) in a single tax year then they would not face a tax charge. The BMA will continue to monitor developments in this area and notify members accordingly.

QOF Indicators, Depression 2 & 3 Business Rules

In response to a number of queries regarding the business rules for Depression Indicators 2 and 3, NHS Employers has published a clarification here.

Real-time Patient Feedback to GPs

Six key findings from a pilot study into how real-time patient feedback could help GP practices to better understand patients’ views on services, identify opportunities for improvement and evaluate whether changes made in response are effective have been set out in the Best Practice Guide to using Real-time Patient Feedback. This Guide shows, using case studies, that it has had a positive impact on practices’ performance and patient engagement where it has been piloted.

Sessional GPs Subcommittee Elections

Ballot papers for elections to the sessional GPs subcommittee will be sent out on Tuesday 19th October. If you are a sessional GP and would like to vote, you should contact the BMA to update your contact details and ensure that you are registered with us as a sessional GP. You can do this regardless of whether you are a member. There are a number of ways in which you can update your details. You can use the BMA website:

– If you are already a registered member of the BMA website, log in, then click on “my details”
– If you are not a registered member of the BMA website, visit the homepage and click on “register”
– Alternatively you can email the BMA’s membership and professional records department at membership@bma.org.uk or you can telephone the BMA’s membership and professional records department on 020 7383 6595

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