Medics Money podcast Ep 245: Avoid this NHS back pay tax trap
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Dec 10, 2024 Recent pay increases for doctors bring both opportunity and risk. Back pay can lead to unexpected tax consequences, with potential tax traps lurking if income surpasses certain thresholds. Understanding how new pay adjustments affect tax codes is crucial to avoid costly miscalculations. The financial implications also extend to pension contributions, with risks of moving into higher tiers. This conversation equips listeners with essential insights to navigate their finances more effectively.
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Secure Payslips
- Download payslips from ESR for your records, especially from previous employers.
- If you can't access ESR, contact your old payroll department to obtain them.
Update Bank Details
- If you've changed bank accounts since leaving a previous NHS employer, update your details.
- This ensures you receive your back pay correctly.
60% Tax Trap
- Check if your back pay pushes your adjusted net income above £100,000.
- This could trigger the 60% tax trap and loss of certain benefits.