AISMA response to 2021 Budget

James Gransby, Vice-Chairman, Association of Independent Specialist Medical Accountants, said:

“In a widely predicted move, the lifetime allowance limit for pensions has been frozen at £1,073,100 for the tax years up to and including 2025/26. This would affect anyone expecting to draw an NHS pension of over £46,656 and with this limit now being frozen, more people will be caught by this tax charge. The effect is an extra £21,000 tax charge on the pension pot at retirement.

“There will be some extra costs for GP practices paying staff the National Living Wage who will see this increase from £8.72 to £8.91 per hour which represents a 2.2% increase.

“With personal tax allowances frozen, doctors who are higher rate tax payers should also expect to pay extra tax. For any doctor earning over £55,000 this will equate to around £100 a month more tax by 2026.”