Regulation 2.M.6 75% Pensionable Pay Threshold and Contribution SurchargeF1

The maximum proportion of the gross sums payable to an Independent Provider in respect of a qualifying contract that may, in a scheme year, be paid to its employees who are members of this Section of the Scheme without it being liable for an employer contribution surcharge, is 75% (“the 75% threshold”).

Where an Independent Provider has two or more qualifying contracts, the 75% threshold is to be determined by reference to the aggregate of the gross sums payable in respect of all of those contracts.

Where the 75% threshold is exceeded, the Independent Provider must pay the Secretary of State an employer contribution surcharge on that part of the total pensionable pay of that Independent Provider’s employees in excess of the 75% threshold.

This is subject to F2paragraph (4).

Where the Secretary of State is satisfied that the Independent Provider has provided a reasonable explanation or justification for the threshold being exceeded, the Secretary of State may require the Independent Provider to a pay an employer contribution surcharge on such part of that excess as the Secretary of State considers reasonable having regard to its declared NHS income, profits, losses and expenses for the scheme year in question.

Where the employer contribution surcharge has been imposed on all or part of the excess in accordance with paragraphs (3) and (4) and the Secretary of State subsequently considers that all or part of it should no longer attract the surcharge, the Secretary of State must notify the Independent Provider of what part of the excess is to remain subject to an employer contribution surcharge.

An Independent Provider must pay an employer contribution surcharge to the Secretary of State within 1 month, beginning with the date of that notice, of being notified by the Secretary of State that it is so payable (“a contribution surcharge notice”): the Secretary of State may, by that notice, exceptionally require a contribution surcharge to be paid within a different period.

Where an Independent Provider fails to pay an employer contribution surcharge, it is liable to pay the F3supplementary charge and interest referred to in regulation 2.J.9A: interest is to continue to accrue on the late paid surcharge for so long as it remains unpaid and further F4supplementary charges may be levied in respect of it.

The Secretary of State may exceptionally waive all or any part of a sum payable by way of interest or F5a supplementary charge.

The rate of the employer contribution surcharge for the scheme year 2014-2015 and subsequent years, is 12%.

Where the 75% threshold is exceeded, the whole of the pensionable pay an employee receives in respect of the performance of services pursuant to a qualifying contract is nevertheless (subject to regulation 2.A.12A) to count both for the purpose of ascertaining that employee’s entitlement to benefits under these Regulations and for the purpose of calculating them.