Since 1 April 2017 NHS Pension Scheme Employing Authorities have been paying a levy to cover the cost of the administration of the NHS Pension Scheme. The levy has been collected along with employers contributions by increasing the rate from 14.30% to 14.38%. This 0.08% charge has been determined to be inclusive of VAT.
Background
With effect from 1 April 2017 funding for the NHS Pension Scheme administration moved from the Department of Health and Social Care to a levy on employing authorities. As a result, as a provider of services, the NHS Pension Scheme has had to register for VAT, submit VAT returns and issue VAT invoices following the same rules as any other VAT registered business.
At this time, due to the costs involved in the process, it is the intention of the NHSBSA to issue annual invoices in arrears for the administration charges for the Scheme, and only to those employers who are expected to be able to reclaim the VAT. Invoices have been issued in June 2018 for the year ended 31 March 2018 and a similar timetable is expected to be in place for 2019. We apologise for any inconvenience this may cause but it is simply not practical for the scheme to issue monthly VAT invoices.
Treatment of VAT charged
Invoices have been sent to those organisations that we expect will be able to reclaim the VAT. For NHS organisations this will be under heading 17 of the HM Treasury Contracting out Direction (Departmental staff records and payroll systems including administration and payment of pensions). These invoices reflect amounts already paid, no further payment is required.
If you have not received an invoice and require one, or have any queries about the content of this letter please contact us at nhsbsa.pensionsfinance@nhs.net.