This short guide will help you obtain your tax year-end superannuation certificate, claim the income tax relief on your tax return and help avoid common mistakes.
How do I claim tax relief on my self-employed NHS superannuation pension payments?
You need to get a copy of your SD86C to share with your accountant or to complete your tax return.
How do I get an NHS superannuation pension certificate (SD86C)?
Your Annual Pensionable Earnings and Contribution Statement (SD86C) is obtained by accessing the NHS compass system.
You will know how tricky it can be to navigate the NHS compass system to obtain a copy of your NHS pension certificate for your tax return. Below are links that should assist you in finding the certificate
- Compass guidance and tutorials will show you various helpful videos and guides to support Compass users.
- How to find your Pensionable Earnings and Contribution Certificate (SD86C) (YouTube video)
These statements are produced yearly after completing the Annual Reconciliation Process (ARR), typically towards the end of July.
They may not be available until later in the year if a dental provider (practice) completes their Annual Reconciliation Report after the 30 June deadline.
Once you have a copy, send a download, screenshot or photo of your computer screen (checking you can read the numbers) to your accountant to ensure they claim the tax relief for you.
Which box on my tax return do I enter my self-employed NHS superannuation pension payments?
Add the employee’s contributions for your self-employment contract to your tax return to claim the tax relief in box three on page TR4.
They are omitted or disallowed as an expense in your self-employment accounts.
Do I include the employer’s contributions for tax relief on my self-employed NHS superannuation pension payments?
Associates exclude the employers’ contributions. Employers’ contributions are paid by the employing authority, not the practice or associates.
Self-employed practice authority contract holders have different rules. They claim the employer’s and employees’ contributions.
I have two superannuation contracts, one as an employee and one as self-employed. Do I need to include all of my employee contributions?
You exclude your employed contributions. The income tax relief on these employed contributions is given to you in your payroll PAYE calculations.
Including the superannuation deductions taken by your employer from your gross pay on your tax return is a mistake, as you will be claiming the tax relief twice.
I have a company and have had superannuation deductions taken from my associate pay. Can I still claim tax relief on these deductions?
If superannuation deductions have been taken from your company pay, there has been a mistake. You can’t operate as an associate using a limited company or partnership and be a member of the NHS pension scheme.
It would be best if you talked to the practice that has taken the deductions from your pay, as they might not have informed the NHS that you are no longer a self-employed ‘dental performer’ and eligible to be an NHS scheme member. You should be able to obtain a full refund from the dental practice for the deductions incorrectly taken.
If you have incorrectly claimed tax relief on your superannuation contributions while operating as the company, you must contact HMRC to report this error.
Do I include my superannuation payments as an expense in my self-employment accounts?
Superannuation payments are not self-employment expenses. They are considered part of your drawings and excluded from your tax-deductible expenses.
The reason why they are excluded is because pension payments only qualify for income tax relief.
Self-employment expenses qualify for both income tax and national insurance deductions.
Excluding the contributions ensures you do not incorrectly claim an expense deduction when calculating your national insurance payment.
When you come to be paid your pension, pensions are paid without incurring a dedication for national insurance. For reasons of fairness, you do not get a deduction for your pension contributions when calculating your national insurance liability.
How do I correctly exclude or add back the superannuation deduction from my self-employment calculations?
It is best to exclude superation for your expenses as they are drawings and not expenses of trading as an associate dentist.
But if your business expenses include your superannuation deductions (and/or reconciliation refunds) and they have been recorded as expenses in any of the boxes between 17 to 30 on page 2 of your self-employment tax return (PAGE SEF 2), you need to add the total in the corresponding box between 32 and 45 as a disallowable expense.
If you have an income of under £85,000 and have used the ‘self-employment (short return),’ you may deduct the figure from any of the entries you have made in boxes 11-19 on the Self-employment page 1 (PAGE SES 1) or Box 20 if you have added you expenses as a total rather than split them out.
A common misunderstanding of reporting associate income and expenses
I see many dentists who prepare their tax returns and some professional accountants making this mistake.
They report their income based on what is paid to them from their practice. This is known as NET income, meaning after deductions. Associate dentist income should be reported GROSS before deductions.
If your turnover is shown after the deduction of practice deductions for lab costs, licence fees, and superannuation expenses, you have incorrectly disclosed this to HMRC. Your turnover should be shown before decisions (this is known as gross, e.g. before deductions), and the deductions, excluding the superannuation, should be shown as expenses.
You can read the HMRC notes describing how to complete your income and expenses self-employed pages for your tax return here for the short return, and here for the full return.
Do I enter the superannuation deductions from my associate pay or what is shown on my NHS annual statement, and why are the figures different
You enter the amount showing on your annual SD86C statement.
You do not add the amount deducted from your associate pay; your ‘in-year’ deductions are often based on your previous year’s earnings and are only estimates of what you will likely have to pay the following year, like the payments on account system work for tax.
The final employee’s contribution for tax relief is calculated once your annual income reconciliation takes place in July and the SD86C certificate is produced.
