QUESTION: I am planning to retire on my birthday, 3 April 2014. Our practice accounting year-end is 31 March.
I plan to take two days’ holiday due to me for the first two days of April. Then by retiring on the 3rd (my birthday) I will benefit in terms of retirement income due to dynamisation of earnings.
I have informed the NHS England local area team and my partner. Our accountant said he could finalise the accounts on 31 of March and I could still retire on the 3 April.
However a colleague of mine suggested it is more advantageous, in terms of pension, to retire at the start of the month rather than the end. Is this true?
Also what are the implications of retiring two days later than the practice accounting year-end? Can I be forced by NHS England or my partner to retire on 31 March instead of when I choose?
ANSWER: If you retire on 3 April you will receive dynamisation of your earnings for the whole of the month of April even though you are retiring at the beginning of the month.
You should be able to choose when you retire from your partnership, I am not aware that NHS England can force you to retire earlier.
From an accounts point of view, your partner will feel that it makes things easier if you retire on 31 March. By retiring on 3 April you are still a partner for two days of the next accounting year so would still appear in the next accounts and would be entitled to two days’ profits.
If your partner doesn’t want you to be included in the following accounts, a way around this would be for you to be paid your share of the actual profit up to 31 March. You could then agree to be paid a fixed amount for the two days in April.
- Jenny Stone is a partner at specialist medical accountants Ramsay Brown & Partners