Conservative pledge for pension tax 'review' dismissed by BMA

A Conservative manifesto pledge to hold an 'urgent review' of punitive tax charges that have fuelled an NHS workforce crisis has been rejected by the BMA.

Tax return (Photo: Drazen/Getty Images)
Tax return (Photo: Drazen/Getty Images)

The Conservative manifesto promises to 'address the "taper problem" in doctors’ pensions, which causes many to turn down extra shifts for fear of high tax bills'.

It says: 'Within our first 30 days, we will hold an urgent review, working with the BMA and Academy of Medical Royal Colleges (AoMRC) to solve the problem.'

Punitive tax bills have forced many doctors to reduce their working hours and turn down extra shifts, leaving the NHS facing a major workforce crisis heading into winter.

Scrap the taper

But the BMA's official response to the Conservative manifesto dismissed the offer of an urgent review as inadequate, warning: 'A commitment to a review is not new and not what is needed.

'We need action. The next chancellor must immediately scrap the damaging annual allowance and tapered annual allowance in defined benefit pension schemes to ensure that no doctor is penalised for going above and beyond for their patients.'

NHS England confirmed last week that it would take 'exceptional action' to address the problem in the short term - offering to pay off doctors' tax bills for the 2019/20 financial year in a bid to encourage them to take on more work.

BMA leaders have called for more detail and warned that the offer - which would see doctors' tax bills paid off from their own pension pots through the 'scheme pays' mechanism, on the basis that their pensions would be topped up when they retire to cancel out the loss - needs to be 'guaranteed contractually and legally', particularly for doctors many decades away from retirement.

NHS pension tax

Accountants have warned that 'significant uncertainties' remain with regard to the NHS England offer, which has been endorsed by health and social care secretary Matt Hancock.

BMA calls for the annual allowance limit to be scrapped for defined benefit schemes such as NHS pensions come just over a month after the Office for Tax Simplification, which provides independent advice to the government on tax, suggested the move in a formal report.

The OTS report welcomed an 'encouraging' government announcement earlier this year that the Treasury would review annual allowance tapering rules.

In a bid to address the impact of pension tax on the NHS workforce, the government has proposed to create the 'most flexible NHS pensions ever'. It is consulting on a scheme to help doctors avoid hitting the annual allowance cap by reducing their pension contributions and slowing down the growth of their pension pots.

These proposals have been heavily criticised, however, with experts warning the move will simply slash the value of doctors' pensions and may not go far enough to remove the disincentive to take on extra work - and health and social care secretary Matt Hancock has admitted this option could be ditched if the Treasury reforms the annual allowance mechanism.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register

Already registered?

Sign in

Follow Us:

Just published

NHS England to redesign GP appraisal in light of COVID-19 pandemic

NHS England to redesign GP appraisal in light of COVID-19 pandemic

GP appraisals are being redesigned to have a greater focus on wellbeing and reduced...

Primary care to lose millions in funding unless PCNs hit recruitment targets in pandemic

Primary care to lose millions in funding unless PCNs hit recruitment targets in pandemic

Hundreds of millions of pounds could be lost to primary care if primary care networks...

Practices told to prepare for 'major expansion' of flu vaccination as QOF pared back for 2020/21

Practices told to prepare for 'major expansion' of flu vaccination as QOF pared back for 2020/21

GP practices have been told to 'gear up for a major expansion of the winter flu programme'...

NHS England unveils GP contract plans for second phase of COVID-19 response

NHS England unveils GP contract plans for second phase of COVID-19 response

GPs have been told to re-start health checks and other suspended services as NHS...

More than 80% of patients report 'good' overall experience of general practice

More than 80% of patients report 'good' overall experience of general practice

Public satisfaction with GP services remains high, with 82% of patients reporting...

GPs condemn 'deafening silence' from chancellor on COVID support funding

GPs condemn 'deafening silence' from chancellor on COVID support funding

GP leaders have condemned a 'deafening silence' on COVID-19 relief funding for general...