Changes to the tier rates will affect GP’s superannuation contributions

Set up 14 years ago, the tiered rates of employee NHS superannuation contributions have remained mostly the same for 7 years, however the new two tiered system brings with it notable changes.

A new tier system is to be phased in over two years and many will therefore see their rates change. Some primarily higher earners will see their contribution rates fall by up to 2% over the two years but some in lower tiers could see their contributions increase by up to 1.5%. To further complicate matters, the initial change, which was due to take place on 1 April 2002 has been deferred until 1 October 2022 so there is to be a mid-year change of rates.

For GP partners, the practices should have submitted the estimates for 2022/23. If not, they should be submitted as a matter of priority as, by not submitting, the PCSE can apply the highest rate irrespective of income.

For sessional GPs, care should be taken when completing forms A & B, particularly in October and April, to ensure the most appropriate rate is being applied.

Salaried doctors should check their employer is applying the new rates and not simply carrying on using the same rate as in previous years.

After the end of the year, the type 1 and type 2 certificates (usually due 28 February following the year-end) should identify any over or underpayments. If the wrong rate has been used but you should be aware that:

  • If you overpay – even though the PCSE seem to be improving, it will still take months or even years to obtain a refund;
  • If you underpay – tax relief is only obtained on contributions paid in the tax year and therefore tax relief will not be given until the year in which the balance is paid.

It is advisable that you ensure that the correct tiered rate is being used and that type 1 and type 2 pension certificates are submitted each year where necessary. The pension certificates not only identify the correct tier, and any balance, but also establish the pensionable pay. If the forms are not submitted there can be a considerable delay when the time comes to draw pension benefits.

If you need help with the tiered rates or with the end of year certificates do not hesitate to contact us.

Terry Bentley-Darby is a Senior Tax Manager – please contact him for more information by emailing or call 01242 776000.

Our specialist medical division is led by Simon Dudfield.  Simon and his team have a wealth of experience in advising medical practices, GPs and consultants.  You can take advantage of our expertise including a full range of accounting, taxation and business advisory services designed specifically for medical practices and practitioners. We are members of the Association of Independent Specialist Medical Accountants, AISMA.