The McCloud Judgment – the NHS Cost Claim Back Scheme

More details can be found in our insight here.

This year, the process of rectifying NHS pension records for both retired and active members of the scheme begins. This will also involve recalculating and resubmitting Pension Annual Allowance growth calculations to HMRC for those members who either previously had a tax charge but also those who may now have a tax charge as a result of the remedy being put in place.

In January 2024 NHSBSA set out its proposals on how it will also remedy costs incurred or to be incurred by members through the NHS Cost Claim Back Scheme.

Costs that can be claimed back

An allowance of up to £1000 including VAT per piece of advice will be claimable back to cover costs incurred in relation to submitting the revised Annual Allowance calculations to HMRC via the HMRC digital service. This is available to members for a period of up to 12 months after they issue you with the revised Remedial Pension Savings Statement.

An allowance of £500 including VAT per piece of advice is available for Financial Advisory services taken up by members to help them making the choice as to leave their pension benefits in the legacy scheme or move them over to the 2015 scheme. The choice decision is taken when you take your pension benefits, so for now it only impacts those already in receipt of their pension or likely to take their pension in the next year.

There is then a wider set of costs which can also be claimed which are less clear. The documentation states;

“You can apply for a refund using the Cost Claim Back Scheme if you:

• paid for professional advice about the move to the 2015 Scheme which is no longer valid due to rollback
• need additional advice due to the remedy changes
• have incurred other direct financial loss”

Consideration will therefore be needed around more complex cases as well as where costs have been incurred on previous advice and modelling which may no longer be appropriate.

What should you do now?

For now, nothing should be done around compensation claims. From April 2024 the process will commence with members receiving information which they will need to act on.

Our Mazars Healthcare Tax and Financial advisory teams will be well placed to assist people through this process, especially for clients where we have your tax and pension records for the period from 2015 to 2022 .

Early engagement will put you in a better place for us to help you through the process of reworking tax submissions, and assisting with compensation claims, so we would encourage you to get in touch at an early stage to start the process off.

Get in touch

If you would like to speak with one of our NHS pensions specialists about the McCloud ruling or any other pension queries, please get in touch through either your normal client relationship lead or by contacting us below.

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