Hospital Dr News

“Pension consultation should include option to scrap the Tapering Annual Allowance”

Senior doctors are claiming the Government’s new consultation on NHS pensions is too little, too late – with many having faced large additional tax bills in the last year.

The consultation, announced by the Health Secretary Matt Hancock, follows calls from the profession for reform to the current pension taxation system.

Senior doctors are falling foul of the ‘pension taper’ – introduced in 2016 – which generates large tax bills for modest uplifts in salary beyond £110,000.

Many are reducing their NHS working hours or retiring early to avoid the tax bills, and waiting lists are expanding exponentially as a result.

The Government claims its consultation will give senior NHS clinicians more control over pensions growth, so they can continue to provide the services that patients need.

It is proposing a 50:50 option which enables senior doctors to halve pension accrual and contributions – and theoretically avoid the taper tax bills.

The BMA is sceptical of the 50:50 option, suggesting it is unfair that doctors should have to receive just half of their normal pension growth to avoid a new tax.

They also say it isn’t sufficiently flexible and will leave hospital doctors and GPs paying too much tax in some years and getting insufficient pension in others.

Doctors will continue to have little choice but reduce the hours they work for the NHS to minimise the risk of incurring an Annual Allowance tax charge which can run into tens of thousands of pounds.

Chair of the BMA Consultants Committee, consultant anaesthetist, Dr Rob Harwood, said: “Doctors need to be able to return to doing the additional work they had routinely undertaken in the past to ensure high quality, safe patient care.

“We believe an effective consultation should have explicitly included the option to scrap the Annual Allowance or Tapering Annual allowance. However, as it stands, the Government must recognise there needs to be a full range of scaled pension membership from 10:10 to 90:90, each with recycling of the residual employer contributions.

“A fully flexible approach like this would be cost neutral to the NHS, because the employer’s pension contributions being given up would be paid as taxable salary. Without recycling, a 50:50 approach would be a substantial pay cut for GPs and hospital doctors, and – with such an unattractive offer – almost certain to be set to fail.”

Meanwhile, the CEO of a major NHS trust suggests it could lose the equivalent of 60 consultants because of doctors’ refusal to work overtime.

Dr David Rosser, of University Hospitals Birmingham, said currently the loss is equivalent to the work of 10 full-time consultants. But they predict this could rise to around 60 within 18 months to two years.

Niall Dickson, chief executive of the NHS Confederation, which represents organisations across the healthcare sector, said: “This is a government created mess and it is past the time when ministers should have cleared it up.

“Operations are already being delayed and cancelled while doctors and other senior staff are reducing their hours and, in some cases, quitting the NHS all doubtless because someone failed to think through the consequences. It is set to worsen as we move into autumn.”

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