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MoneySavingExpert.com investigation reveals NHS tax reclaim chaos

Tens of thousands of NHS staff could get back 1,000s in wrongly paid tax

By Guy Anker

4 November 2016

MONEYSAVINGEXPERT.COM

Cutting your costs, fighting your corner

 

Embargoed for 09:30h 4th November 2016

 

MoneySavingExpert.com investigation reveals NHS tax reclaim chaos

-          Tens of thousands of NHS staff could get back £1,000s in wrongly paid tax

-          Many struggling to reclaim with widespread confusion about the process

-          HMRC and NHS trusts’ process accused of “lack of clarity”

An investigation by MoneySavingExpert.com has found NHS staff who overpaid tax while training are struggling to get their money back because of a chaotic reclaim system.

 

Tens of thousands of employees who completed Widening Access Training (WAT) schemes could be in line to get substantial tax and NI rebates by applying to HMRC through their NHS trust. They were taxed as if they had undertaken paid work when in fact it was a training allowance or scholarship.

But the investigation has uncovered a refund process that is disorderly, slow and confusing for NHS workers trying to get their money back, which in some cases could be worth several thousand pounds.

MoneySavingExpert.com published advice to NHS practitioners back in July on how to claim if they might be eligible. Since then, dozens of NHS staff have tried to reclaim, with one claiming £13,500, but many others have written to MSE to criticise the lack of clarity on who should be responsible for handling their WAT refunds. One group of health visitors described it as a "long, laborious, inconsistent process, with several anomalies, limited communication and no explanation for vast differences in amounts paid back."

MoneySavingExpert.com managing editor Guy Anker says: “It’s an utter shambles between HMRC and the NHS Trusts. There is confusion about the rules, variances in what claimants get, and despite it being money they never should have paid in the first place, employees are essentially being put off from getting their money back.

“HMRC needs to issue clear guidance on both tax and National Insurance rebates to all trusts and regardless of who’s at fault, anyone enrolled in this scheme going forward needs to have the correct deductions made automatically through payroll.”

This issue has reached the attention of MPs, with Catherine West MP (Hornsey and Wood Green) and David Hanson MP (Delyn) raising WAT refunds in parliamentary written questions. In response, HMRC has explained it has received 16,762 applications, with 8,209 getting their cash back since the system was centralised in 2013.*

David Hanson MP, who has been helping his constituents reclaim, said the government must address “a lack of clarity on the process, the speed of the process and give clearer information on what trainees are owed and when it will be repaid.”

He added: "The response [to applicants] seems to be very slow given that the government has indicated that this money should be repaid."

The MP now plans to ask a question in Parliament about how many people are entitled to a refund.

 

What is Widening Access Training?

Nurses, midwives, health visitors, doctors and psychologists are among those who took part in WAT schemes, undertaking full-time training at colleges and universities. They began in 1999 and are designed to broaden the professional knowledge of NHS workers.

This training offers some tax and NI exemptions. It seems that payments made to those on the scheme were taxed as if this was paid work, but some should never have paid it in the first place.

How much money could be refunded?

WAT trainees that MoneySavingExpert.com has spoken to who successfully reclaimed typically get over £1,000 back and one got £13,500.

Neither the NHS nor HMRC could give a figure for how many NHS workers are likely to be owed a tax or NI refund, but MoneySavingExpert.com believes it could run into the tens of thousands.

Notes to editors:

Please visit the MoneySavingExpert.com NHS reclaim guide to see who is eligible and how to reclaim.

 

* Information provided by HMRC about WAT refunds in parliamentary written answers

Tax year

Refunds received for overpaid tax and NI while on NHS WAT schemes (1)

at 18 July 2016

Applications processed* (2)

at 19 October 2016

2013/4

252

253

2014/15

1,115

1,116

2015/16

4,100

4,175

2016/17

2,742

11,218

Information provided by Jane Ellison, HM Treasury through parliamentary questions from Catherine West MP and David Hanson MP. Latest information correct as of 3 November 2016. These figures include claims made through NHS trusts and directly through HMRC.

*HMRC has clarified that “processed” applications means received applications.

(1) http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-07-18/43281

(2) http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-10-18/49140

 

 

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