BMA calls on Tory leadership candidates to fix GP pension tax crisis

Rishi Sunak and Liz Truss must make a commitment to solve the GP pension taxation crisis within the current tax year, the BMA has said.

Sign outside BMA House
BMA House (Photo: Malcolm Case-Green)

In a wide-ranging letter to the Conservative leadership candidates, BMA chair Professor Philip Banfield warned that the crisis had to be solved to keep doctors working in the NHS.

Professor Banfield wrote: ‘In the short term, government must address the urgent issues caused by inflation, resulting in doctors incurring huge tax bills on non-existent “pseudogrowth”, by amending the Finance Act or introducing an NHS annual allowance compensation scheme.'

Soaring inflation has seen GPs paying up to half their post-tax income for pension growth from which they never benefit.

Pension tax

One solution proposed by the BMA is the introduction of a tax-unregistered scheme such as that enjoyed by judges - although the idea was rejected by economic secretary to the Treasury Richard Fuller last month.

Professor Banfield added: 'In the longer term introducing a tax unregistered scheme for higher earners in the NHS, similar to that granted to the judiciary, would provide a creditable, fair and affordable solution that would remove the barriers currently limiting the amount of care doctors can provide for their patients.’

The letter also highlights other financial problems for GPs including the government’s pay announcement, which it said amounted to a real-terms pay cut.

Unfunded pay rise

The government’s failure to deliver additional funding to cover the cost of pay increases has also angered the BMA, because paying the award will leave practices with five-figure financial losses.

Professor Banfield said: ‘GP partners are being left to once again find the money for uplifts for their practice teams’ salaries with no additional funding made available to them, this is against a backdrop of soaring inflation and utility costs that partners are having to front without any support from this government - this is quite frankly unacceptable and unsustainable, practices will fold.’

The warning comes as GPonline published details of an analysis by a senior BMA GP of the impact of inflation and the unfunded pay rise on practice finances - which warns some practices could go out of business within two years.

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