Experts at property tax matters, advising you on the most tax efficient manner to arrange your property transactions

DOCTORS AND NHS medical professionals may be hit with tax penalties after the NHS Business Services Authority (NHSBSA) admitted to “gross errors” in calculating pension contributions, according to reports. According to the British Medical Association (BMA), nearly 800 doctors were issued with incorrect pension savings statements for the 2023/24 tax year.

In today’s Shipleys Tax brief we look at the latest NHS pension blunder that has left many doctors and consultants at risk of HMRC penalties. Errors in annual allowance calculations mean some GPs cannot finalise their tax returns on time, creating unnecessary stress and possible charges. Here’s what’s gone wrong, why it matters, and—most importantly—what to do now.

What’s gone wrong?

According to the BMA, at least 757 doctors were issued incorrect 2023/24 Pension Savings Statements (PSS). The error relates to the opening value for 2023/24, which was wrongly increased by an extra 1.5% on top of the 10.1% CPI revaluation set by law. This produced incorrect Pension Input Amounts (PIAs) and has made accurate self-assessment difficult for affected clinicians. The NHSBSA has acknowledged the error and indicated the PIA shown was lower than it should have been. 

The error relates to the opening value for 2023/24, which was wrongly increased by an extra 1.5% on top of the 10.1% CPI revaluation…

What does HMRC say?

HMRC allows you to file on time using the best available (provisional) figures and amend within 12 months of the filing deadline without a late-filing penalty. Do note that interest can still apply if extra tax becomes due on amendment. NHSBSA guidance mirrors this approach for affected members. 

Annual allowance refresher – why this is an issue

• Standard annual allowance: £60,000.
• Tapered allowance: if threshold income > £200,000 and adjusted income > £260,000, the allowance tapers down to a minimum of £10,000 at higher adjusted incomes. 

Practical steps for doctors to take now

1. Identify if you’re affected – check your 2023/24 PSS and any NHSBSA letters; note the 1.5% opening value issue. 
2. File by the deadline using estimates – protect yourself from late-filing penalties; diarise to amend within 12 months when the corrected PSS arrives. 
3. Retain evidence – keep NHSBSA/BMA correspondence and workings you used for your estimate.
4. Re-work your position – use payslips and prior statements to sense-check likely PIA and possible carry-forward.
5. Use carry-forward – bring in unused allowances from the previous three years to reduce any annual-allowance charge (where eligible).
6. Assess taper risk – if you’re around the £200k–£260k thresholds, get advice to avoid inadvertent taper traps. 
7. Claim your costs – if you’ve incurred extra accountancy fees or interest solely because of this error, the NHSBSA will consider reimbursement. Keep invoices and bank proof. 
8. Amend promptly – when your corrected PSS arrives, submit the amendment to limit interest and tidy up your records. 

File by the deadline using estimates – protect yourself from late-filing penalties; amend within 12 months when the corrected PSS arrives…

Why this matters for medical professionals

The NHS pension is a major and valuable benefit. However, complex annual allowance and taper rules can create unexpected tax charges and discourage extra sessions—administrative errors only make the situation worse. Specialist advice helps ensure you pay the right tax—no more, no less. 

Conclusion – take professional advice

At Shipleys Tax, we specialise in advising GPs, consultants and healthcare professionals on NHS pension tax. We regularly:

• Check, amend and appeal incorrect pension tax calculations;
• Structure earnings to minimise annual-allowance exposure and protect retirement wealth;
• Handle filings on time—even where provisional figures are needed—and tidy up once corrected data arrives.

Concerned about your NHS pension statement or potential tax penalties? Contact us below:

Sheffield: 0114 303 7076                        Leeds: 0113 320 9284                 

Email: info@shipleystax.com

Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.

Want more tax tips and news? Sign up to our newsletter below.

Email address

First Name

Last Name

Leave this field empty if you're human:

GIVEN THE INCREASE in property values, frozen IHT thresholds, and increasing scrutiny of trusts and estate planning by HMRC, more estates than ever are being pulled into the IHT net. One common strategy for reducing Inheritance Tax (IHT) is putting property or savings into trust. Done correctly, it can remove assets from an estate entirely, helping families reduce their exposure to tax on death. But where the arrangements are poorly implemented or the settlor remains involved, things can go badly wrong.

In today’s Shipleys Tax brief, we look at a recent Tribunal case which highlights a common – and costly – trap in inheritance tax (IHT) planning and to how to avoid this. HMRC successfully argued that over £440,000 in trust assets remained taxable on death — despite IHT planning documents suggesting otherwise. The case serves as a warning on how easy it is to fall foul of IHT rules, even with well-intentioned planning and where the practical impact of the planning is not fully thought through. With further reforms under discussion, it’s likely that reliance on informal or outdated planning will face even greater challenge from HMRC.

One common strategy for reducing Inheritance Tax (IHT) is putting property or savings into trust.

The Plan

Many individuals put property or savings into trust thinking it will reduce the value of their estate for IHT purposes. Done correctly, this can work in many cases. But done carelessly – or worse, informally – it can unravel years later, with substantial tax implications.

In essence, that is exactly what happened in a recent case before the First-tier Tribunal, where a family’s well-meaning trust planning failed to exclude over £440,000 from the estate. Despite trust documents stating the assets had been given away, the deceased’s continued involvement meant HMRC was able to include them in the death estate – unfortunately triggering a significant IHT charge after death.

A Family Trust

Back in 2000, Mr Mohammed Chugtai effectively set up two trusts, one covering a semi-detached property and shop, where his daughter lived – and the other covering a bank account into which rent and other income was paid.

In the trusts his children were named as beneficiaries and Mr Chugtai gave up all rights to benefit from the assets. But as it turned out, the reality didn’t quite reflect the legal paperwork.

Over the next 17 years, Mr Chugtai continued to live in the property, ran a retail business from the shop, and used the trust-held bank account to pay personal and household bills. Even a personal tax bill was settled from that account. When the shop was eventually rented out, the income was declared on his personal tax returns – not by the trust.

Despite trust documents stating the assets had been given away, the deceased’s continued involvement meant HMRC was able to include them in the death estate

Although his motivation was to care for a vulnerable daughter – and no one disputed the family circumstances – HMRC took the view that he never truly gave up benefit of either asset. Unfortunately for the Chugtai family the Tribunal agreed.

Why It Went Wrong

This case is a textbook example of what can go wrong when Inheritance Tax Planning is implemented without full and careful follow-through. While the legal structure appeared sound on paper, the deceased continued to behave as though he still controlled and benefited from the assets.

The Tribunal focused on what happened in practice:

• Was rent paid for living in the property?
• Why utility bills and council tax were paid from the trust-held account
• Income and savings continued to flow through the trust-held account.
• The deceased used the shop for business purposes and later for rental income.

The trust deeds clearly excluded him from benefiting. But the Tribunal was clear that actions speak louder than words and hence superseded the legal paperwork.

This case is a textbook example of what can go wrong when Inheritance Tax Planning is implemented without full and careful follow-through.

The judge even commented: “Fine words butter no parsnips” – meaning that well-drafted documents are irrelevant if they’re not matched by practical action.

The Bigger Problem: Common Tax Traps

Cases like this are more common than many realise. Clients often set up trusts with the right intentions but fail to separate themselves from the assets. This might be for practical reasons – ease of use, reluctance to let go of control, or simply not realising that everyday behaviour can have tax consequences.

Even helping a family member can become problematic. The Tribunal acknowledged that Mr Chugtai’s primary reason for returning to the property was to care for his daughter, but that, unfortunately, motive is not a defence when assessing tax liability. The benefit to him – free accommodation, access to funds – was sufficient to render the planning ineffective.

How to Avoid This Hidden Tax Trap – Basics

Inheritance tax planning using trusts can be very effective. But it must be implemented carefully and consistently. Here are some key issues to be aware of:

• Giving up ownership is not enough – you must also give up control and benefit.
• Using the same property or account after gifting it can undo the planning.
• Trust records, accounts and tax returns need to be maintained properly.
• HMRC looks at what actually happened – not just what’s written in the deed.

There are legitimate ways to mitigate IHT even where the donor continues to have some connection with the asset – but these require clear planning and robust documentation.

In this case (and with the benefit of hindsight), there were better alternatives that might have achieved the family’s goals, preserved care for the daughter, and reduced the IHT burden – but they were not followed.

Inheritance tax planning using trusts can be very effective. But it must be implemented carefully and consistently.

Final Thoughts

This case is a cautionary tale for clients and advisers alike. It shows how even well-intentioned inheritance tax planning can backfire if the legal form isn’t matched by practical substance.

Trusts remain a powerful tool for wealth protection and estate planning – but they demand attention to detail, proper administration, and a genuine transfer of benefit and control.

In some cases, personal or family circumstances can change significantly over time, making it difficult — or even impossible — to implement the original advice as intended. In such situations, it’s vital to seek timely follow-up advice to ensure the planning remains effective and compliant

If you’re considering using trusts in your IHT strategy, or if you already have one in place, now is the time to review it. The cost of inaction – as one family learned – can run into hundreds of thousands.

For further assistance or queries, please contact us.

Leeds: 0113 320 9284                                 Sheffield: 0114 272 4984

Email: info@shipleystax.com

---

Please note that Shipleys Tax do not give free advice by email or telephone. This article is intended for general information only and does not constitute tax or legal advice. Clients should seek professional guidance before making any decisions.

---

Want more tax tips and news? Sign up to our newsletter below.

Email address

First Name

Last Name

Leave this field empty if you're human:

WITH THE INEXORABLE rise of Gen Z influencers, vloggers and digital-first entrepreneurs, HMRC is quietly sharpening its tools — and its focus. What perhaps started as hobbies, gifted skincare or side-hustle brand collabs (collaborations), has now evolved into a full-blown economy, some with an international dimension. And the taxman, no doubt, is watching…

The Taxman Really Is Watching

From YouTube and TikTok to affiliate marketing and Patreon subscriptions, content monetisation and marketing has not gone unnoticed by HMRC. In recent years, the tax authority has:

• Used AI-driven algorithms to flag high-risk accounts and cross-check undeclared income
• Secured data-sharing agreements with major platforms to identify high-earning creators
• Scanned public content hashtags like #ad or #gifted, brand mentions and sponsored posts
• Issued compliance letters and launched investigations into unreported influencer income or “free” gifts

Whether you’re being paid to promote skincare on Instagram, monetising a YouTube channel, or receiving “gifted” products in exchange for exposure, the question of taxation is not just “on trend” — it’s essential.

In today’s Shipleys Tax note, we look at the key UK tax considerations for influencers and content creators, outline common pitfalls, and offer practical advice for staying on the right side of the taxman. Whether you’re just starting out or scaling your platform into a business, these insights could save you money, stress and an unwelcome call from the Taxman.

I Didn’t Know That Was Taxable…

Many influencers don’t realise that non-cash compensation — like beauty bundles, luxury trips, free gear or affiliate perks — may all be treated as taxable income by HMRC if given in exchange for something, e.g. publicity or promotion.

We’re seeing a marked increase in enquiries from content creators caught out by unexpected tax bills, VAT thresholds, or vague records around “freebies”. The tax rules are evolving — but HMRC’s expectation is clear: if you’re earning, even in kind, it needs to be declared.

“…non-cash compensation — like beauty bundles, luxury trips, free gear or affiliate perks — may all be treated as taxable income..”

Summary Tax Rules For UK Content Creators

Whether you’re a full-time vlogger or running a content side hustle, you need to understand your obligations. Here’s what to keep in mind:

What Counts as Taxable Income?

Most forms of influencer income are taxable. This includes:

• Paid brand collaborations and sponsored posts
• Ad revenue from platforms like YouTube, TikTok or Instagram
• Affiliate marketing commissions
• Event appearances and speaking fees
• “Gifted” products or services with promotional strings attached
• Transfers of assets in lieu

Tip: HMRC values non-cash gifts at market rate. That free trip or high tech camera? It’s potentially income. However, where the item has been donated for an online review here it can get murky.

Maximise Tax Efficiency with These Key Allowances

1. £1,000 Trading Allowance

You don’t need to declare income under £1,000 — useful for micro-influencers testing monetisation.

2. Claim Legitimate Business Expenses

Claim what you use for your content, such as:

• Cameras, mics, ring lights
• Editing software
• Travel
• Home office costs
• PR, legal and accountancy fees

Tip: Lifestyle items (e.g. designer handbags) rarely qualify as business expenses. However, knowing what to legitimately claim as a business expense can greatly reduce any taxable income.

Pitfalls to Avoid

• Ignoring Smaller Payments: All income must be declared if over the threshold
• Overlooking Gifted Items: These are often taxable if given in exchange for promotion
• VAT Blind Spots: You must register for VAT if turnover exceeds the current VAT threshold.
• Poor Record-Keeping: No records could mean denied deductions or worse. Especially when Making Tax Digital for Income Tax comes online (2026) the need for good record keeping will be crucial and penalties will apply for failure to comply.

Tip: definitely use a separate bank account (any personal account will do) for social media earnings and paying for costs.

Basic Tax Planning Strategies for Content Creators

If your content is earning real money, plan ahead:

1. Form a Limited Company

Once income passes £30–50k, incorporation may offer tax efficiency:

• Corporation tax (19–25%)
• Salary/dividend flexibility
• Limited liability

2. Income Structuring

Involving a spouse/partner? Structuring as a partnership or limited company may allow you to use their allowances to save money

3. Pension Contributions

Tax-deductible and helps build long-term savings.

4. Annual Investment Allowance

Claim 100% relief on business-related capital expenses (up to £1m).

5. Flat Rate VAT Scheme

Simplifies VAT and improves cash flow for some creators.

Important: These strategies are not one-size-fits-all. Creator income structures vary — from cash to crypto, brand equity to international deals. Always seek professional advice tailored to your specific set-up before acting.

Staying HMRC-Compliant: The Five Essentials

1. Register with HMRC (self-employed or company)
2. File your Self Assessment by 31 January
3. Keep clear records of all income, expenses, and gifts
4. Budget 25–30% of earnings for tax
5. Speak to a Tax Adviser at the earliest opportunity

When to Speak to a Specialist

It is best talk to a qualified adviser like Shipleys Tax as early as possible, however we recommend the following general guidelines:

• You earnings are rapidly increasing
• You receive international payments, crypto, or equity
• You’re thinking about tax planning strategies
• You’re behind on filings or have received a letter from HMRC
• For high-earning creators and entrepreneurs, the freedom to work from anywhere presents unique tax planning opportunities that are worth exploring.

The Final Cut: Your Channel is Your Business

So treat it like one. Success online has tax consequences offline which sometimes can be overlooked. If you’re building a content brand, the HMRC expects you to act like an actual business. Set up the right structure, track your earnings, and get advice early — before the algorithm or HMRC knocks at the bedroom door.

For further assistance or queries, please contact us.

Contact Us page

Email: info@shipleystax.com

Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.

Want more tax tips and news? Sign up to our newsletter below.

Email address

First Name

Last Name

Leave this field empty if you're human: