Hospital Dr News

Pension taper tax having negative impact on paediatric workforce, college says

Changes to pension tax legislation in the UK have significantly increased pressure on the paediatric workforce, according to the Royal College of Paediatrics and Child Health (RCPCH).

In a survey of 715 paediatricians in the UK, more than half (56.5%) of respondents said they have changed their working practices to avoid incurring unexpected tax bills.

Fifty nine per cent of respondents think that pension related tax bills have led to a reduction in paediatric services and 79% said that they are likely to retire earlier because of this issue.

Respondents cited increased waiting list times, closed wards, cancelled clinics, poor morale, and concerns around patient safety.

Around one third of respondents have already been issued with a pension related tax bill and the average value of the bill is between £10,000 and £20,000, with many totalling over £50,000.

Furthermore, the majority of respondents (79%) could not easily find out if they are liable for a pension related tax bill.

Grace Brown, Policy Officer at RCPCH, said: “In 2016, the then Chancellor of the Exchequer George Osborne introduced new legislation on pension savings. A reduction in pension tax relief for high earners was designed to bring in more money for the Government without causing financial harm to the majority of the public.

“The complexity of the rules around pension tax relief, however, has had serious and sometimes life changing consequences for many people working in the NHS. As such, a policy that was intended to only affect a minority is exacerbating workforce shortages within the health service and impacting on the healthcare of the entire UK population.”

The research follows an announcement by NHS England that the NHS will meet the costs of pension tax bills run up by senior doctors for 2019/2020 tax year.

The one-year pre-election deal will see doctors pay tax bills out of their pensions initially, in exchange for NHS-funded top-ups at retirement.

However, many have questioned whether this will be enough to persuade senior doctors to continue – or re-start – working long hours for the health service.

Dr Camilla Kingdon, VP for Education and Development at RCPCH, said: “It goes without saying that neither me nor my colleagues have a problem with paying our fair share. We are public servants and believe passionately in the NHS.

“But it stings to be handed an astronomical and unexpected bill, incurred as a strange form of punishment for career advancement and picking up extra shifts to help carry some of the rota pressures we all face.”

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