Doctors: NHS Pensions Clarification

Pensioning income from limited companies – clarification from NHS pensions

With the changing landscape of the NHS, limited companies are becoming more frequently used as a vehicle for holding NHS contracts.  It is vital for all involved in such companies to establish the pension status of the earnings generated for both staff and shareholders.

Under the traditional scheme rules all of a company’s shareholders must be in the NHS “family” if it is to be granted employing authority (EA) status.  This seemed a fairly straightforward requirement to meet, but NHS Pensions have recently clarified that all classes of shares must be held both legally and “fully” beneficially by a member of the NHS “family” to get that status.

In other words, these rules will not allow a company to obtain full EA status when, for instance, a GP holds one of its shares on behalf of their fellow partners.  Some companies may have inadvertently lost their EA status without realising it, meaning that the salaries and dividends it pays will not be pensionable.

In such situations it may still be possible to find a way to pension some salaries, but dividends will remain un-pensionable.

If you would like more information on this change, please get in touch with Claire Hebdige on 01768 864466 or email claireh@doddaccountants.co.uk

 

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