The NHS Pensions Agency has published new guidance on superannuation issues and operating as a limited company.
With respect to associates (performers) operating through limited companies, they have not been able to ‘pension’ their GDS/PDS income since 7th November 2011. This is because the sub-contractor limited company is not recognised under the statutory NHSPS regulations. The implication of this for associates working in predominately NHS practices has been to substantially reduce the benefits of incorporation.
The guidance also contains confirmation of the NHS superannuation position for practice owners. The pensionable pay for providers is basically their net income derived from the GDS/PDS contract after taking account of the NHS income of the other dentists and the 43.9 percent pensionable earnings ceiling. If a provider or performer is not a member of the NHSPS, their GDS/PDS net income is still accounted for under the pensionable earnings ceiling. This is to ensure that their NHS earnings are not assigned to another.
Where a GDS/PDS practice operates as a limited company, the director and shareholders can only pension income that they take each year as salary or dividends. It cannot be pensioned if taken in a future year.
It should be noted that dividends are only pensionable when they are in respect of GDS/PDS income. If any part of the dividend is in respect of private work, the private element must be removed, leaving only pensionable NHS income.
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