Pension mistake costs GPs £2,000

Thousands of GPs working across primary care organisation (PCO) boundaries may be paying up to £2,000 too much superannuation, accountants warned.

They believe partners who work in one PCO by day and another for out-of-hours shifts may end up paying double employee’s contributions, and employer’s contributions they are not liable for.

Anthony West, of accountants Williamson West, said that an average GP affected was likely to be losing around £2,000 a year based on total out-of-hours income worth £10,000.

The problem occurs because the annual certificate of superannuable profits GPs complete does not distinguish between income they earn out-of-hours and income earned as a partner in a practice.

On income from practice profits, GPs have to pay a 6 per cent employee’s superannuation contribution and a 14 per cent employers’ contribution.

On NHS income from sources outside their practice, they should only pay the 6 per cent employee’s contribution.

GPs who work out-of-hours for a neighbouring PCO have the 6 per cent employee’s contribution deducted from their earnings at source, and the employing PCO pays the 14 per cent employer’s contribution.

But potential overpayment occurs because out-of-hours income is included on GPs’ superannuation certificates in full, including the deducted 6 per cent employee’s contribution. When the ‘home’ PCO calculates how much superannuation the GP owes, it is likely to treat all income as practice income. It therefore levies a second 6 per cent employee’s superannuation contribution, and a 14 per cent contribution that the GP is not liable for.

The concerns apply where the out-of-hours organisation is run by a PCO, but not if the out-of-hours provider is a private firm. This is because income from the private provider would count as non-NHS income, and would not be superannuable.

‘Every accountant working for GPs should reconcile the calculation the home PCO has done to make sure out-of-hours work has been taken into account,’ Mr West said.

He said that there was no standard mechanism for PCOs to communicate with each other about out-of-hours work by GPs on performers’ lists in another PCO.

‘Anyone who does out-of-hours work in a neighbouring PCO should speak to their home PCO’s superannuation officer and make them aware of it,’ he said.

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