BMA secures victory over pensions clawbacks from GP widows
By Gareth Iacobucci
The BMA has successfully forced the Government into a U-turn over its controversial plan to use a tax loophole to claw back thousands of pounds from GP widows, following last year's High Court pensions victory.
GP leaders have negotiated a tax refund for the widows and widowers of GPs caught out by the unintended consequences of last year's ruling, which found that the Government acted unlawfully when it decided to cap GP pensions.
Pulse first revealed in February that widows and widowers of GPs due to benefit from the judgment had been told they must pay 40% income tax on their lump sum payment – even though the payment was intended to be tax-free, and surviving GPs were not taxed. Her Majesty's Revenue and Customs had ruled any lump sum payment made to the surviving spouse of a deceased GP more than two years after their death should be taxed.
But the BMA has forced the Government to back down after writing to health secretary Andy Burnham, arguing that GPs and their families were being unfairly penalised.
The Department of Health has subsequently agreed to meet the BMA's demands by setting aside funding to meet the tax liability for those affected.
Dr Andrew Dearden, chair of the BMA pensions committee, hailed the decision as a victory for ‘common sense', and said he was pleased that another potential legal challenge had been avoided.
‘It is a very pleasing result. The DH realised this was their liability, and it has avoided the need for more legal unpleasantness,' he said.
‘It is common sense. This is a consequence of their error - it's only right that they should pay for it.'The BMA has forced the Government to back down The BMA has forced the Government to back down