By: 4 August 2021
Cavendish Medical – Tax payment scheme deadline extended

Dr Benjamin Holdsworth, of Cavendish Medical, on how to apply for tax charge support

If you would like to apply for voluntary ‘Scheme Pays’ to settle large tax bills caused by breaching annual pension savings limits in 2019/20, you will now have more time to do so. The application deadline which normally falls on 31 July each year has been extended to 31 March 2022 to support those dealing with the impact of the Covid pandemic.

When individuals elect to use Scheme Pays, the NHS Pension Scheme pays their annual allowance tax bill directly to HMRC on their behalf, with that member’s benefits in retirement being reduced accordingly.

You may also recall that the government agreed to pay the tax charge of clinicians in England and Wales who breached the annual allowance pensions savings limits for 2019/20 only – but those affected must apply for ‘Scheme Pays’ to claim this offer.

One confusing element for those who intend to apply is that you will have already completed your 2019/20 tax return earlier this year. Hopefully, when doing so, you noted your intention for Scheme Pays to cover any annual allowance charge and did not pay via self-assessment.

Even with the deadline extension in place, it is sensible to complete the necessary forms as soon as possible and have your figures double-checked. The ‘McCloud judgement’ could mean that the numbers for the last few years need to be changed retrospectively.

The McCloud judgement ruled that doctors affected by the deemed ‘age discrimination’ of moving to the 2015 NHS Pension Scheme have the right to make a ‘deferred choice’ of which remedy benefits to take. This means they can decide at the time of their retirement whether to accept the pension benefits from their previous 1995 / 2008 pension scheme or those from the 2015 scheme for the remedy period which is from 1 April 2015 to 31 March 2022.

Every amendment to the pension and tax rules has the potential to make your pension plan, and its calculations, ever more complex. The best course of action is to do as much as you can ahead of time and seek help to check you are still on the right track when things do change.

Dr Benjamin Holdsworth is director of Cavendish Medical – specialist financial planners for medical professionals in the NHS or private practice. For a second opinion on your finances, please contact us on 020 7636 7006.


The content of this article is for information only and must not be considered as financial advice. Cavendish Medical always recommends that you seek independent financial advice before making any financial decisions. 

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The value of investments and the income from them can fluctuate and investors may get back less than the amount invested.