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HMRC internal manual

Business Income Manual

Doctors and dentists: superannuation

Although doctors and dentists with a contract for service to the NHS are treated as self-employed individuals, they are eligible to make contributions to the NHS Pension Scheme. Where practitioners are members of the NHS Pension Scheme, they are eligible to receive a pension on the basis of final salary or Career Average Revalued Earnings (CARE).

Where the practitioner is an employee, they will make a superannuation contribution and the Primary Care Trust (PCT) will make a contribution.

Where a practitioner is self-employed, they are responsible for making both the “employee contribution” and the “employer’s contribution”; for tax purposes, both elements are relievable as member contributions. This practice started in April 2006. Prior to then, the NHS would make the employer’s contribution in respect of the practitioner. In theory, the payments made to practitioners have been uplifted to cover this increase in superannuation costs.

Self-employed practitioners will be eligible for tax relief on the contributions they pay to a registered pension scheme.  The contributions are made net of basic rate Income Tax, with additional relief provided by extension of the basic rate and higher rate tax bands.  As the practitioner will themselves receive tax relief on the contribution, such superannuation payments are not allowable deductions in computing trading profits..

Superannuation contributions to the NHS Pension Scheme are disregarded for the purposes of determining whether pension contributions exceed the annual allowance.

For more information on contributions to registered pension schemes, see the Pensions Tax Manual from PTM040000.  The guidance at PTM044100 makes specific reference to tax relief on contributions paid by general practitioners and dentists.