Autumn Statement: no new NHS funding and no pensions U-turn

By November 23, 2016Medical Accounting
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Chancellor Philip Hammond has confirmed that there will be no new cash for the health service in today’s Autumn Statement.

This is despite calls from MPs to inject more money and warnings from the National Audit Office that the service is facing ‘unsustainable pressures’. It is disappointing news but certainly no surprise.

Payroll

The government is going ahead with off payroll working rules in the public sector following consultation. GP practices and out of hours organisations will have to look at how they pay locum and shift doctors from April 2017 and account for tax in some cases. Those working in a similar way to employees will be taxed in the same way as employees. The devil will be in the detail but compliance aspects have risen significantly for employing organisations. More information will be provided once HMRC publishes the full guidance.

Changes to VAT flat rate

The Autumn Statement has announced minor changes to VAT for doctors who use the flat rate scheme. A new rate of 16.5% will apply from April 17 for labour-only businesses.

Pensions

There were no changes to the pensions savings tax rules introduced by the previous chancellor, so the rules for higher earning NHS workers remain which means we will see significant tax increases for those with earnings from all sources after pension deductions of more than £110,000.

“The calculations are complex and we have reservations around whether the NHS Pensions agency can deal with them. Higher earners need to prepare for significant tax payments from January 2018 onwards and take advice now.”

For further information on pensions see our article and guide:
Clash of options for high earners over pensions changes

 

 

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