Back in February, I wrote a blog detailing the effect the annual allowance tapering legislation was having on senior NHS clinicians and many others with a defined benefit pension scheme, which can be found here.
I explain that, although NHS England has stepped in to help some NHS staff affected by the charges for 2019/20, the government was yet to amend the legislation.
Following the spring budget on 11 March 2020, it has been announced that, in an attempt to help those that are hit by the annual allowance tapering, each threshold will be increased by £90,000.
The threshold income limit (which is net income after pension input) will therefore be increased from £110,000 to £200,000, and the adjusted income limit (the total income including pension input) has increased from £150,000 to £240,000.
The change in legislation will likely bring a large number of senior clinicians outside the scope of the annual allowance tapering, and will go a long way in helping to reduce any annual allowance tax charge payable.
It is however worth noting that the government also announced that the minimum that the allowance could be tapered to would be reduced from £10,000 to £4,000, although this will only affect those with an adjusted income of over £300,000.
As we expected, both of the changes will take effect from the 6 April 2020 and therefore many senior clinicians will be relying on NHS England’s stop-gap assistance for 2019/20.
If you would like our assistance with reviewing your pension position for taxation purposes, please contact us here.