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GPs go forth

BMA warns reported increase in pensions tax threshold 'will not solve problems'

Raising the threshold income at which doctors see their tax-free pension allowance tapered, from £110,000 to £150,000, will not stop medical staff from reducing shifts, the BMA has warned in response to reports the Government is looking at the measures.

There have been suggestions that the Government is considering changing rules affecting the tax-free allowance for pensions, which will mean all high-earners - not just doctors - earning more than £110,000 will be given a tax break.

The measures have not been confirmed but The Times reported today that the tax relief would ensure lower tax-free allowances would only start to apply to people who have an income of £150,000.

Currently, those earning £110,000 and above have their tax-free limit cut, in a tapered manner according to income - and to as low as £10,000 for those earning the most.

It is believed the proposed changes would help to solve the doctors' pensions crisis - in which medical staff are reducing their shifts to avoid tax charges on pensions.

But Dr Vishal Sharma, BMA pensions committee chair, said: 'In its election manifesto, the Government pledged to "address the taper problem", but this proposal would do no such thing.

'It does not fix the fundamental problem of doctors being forced to limit the work they do to prevent being hit with significant charges on their pensions and many will still in effect be paying to go to work.'

The changes proposed today do not go as far as scrapping the tapered annual allowance altogether, which the BMA has been calling for.

It has also been calling for an end to the cap on how much pension pots are allowed to increase by, tax-free, in a year - which has been set at £40,000 since 2016.

The BMA said removing this annual allowance was the only way to stop doctors from declining shifts in a bid to avoid the tax charges.

Dr Sharma added: 'The BMA firmly believes that scrapping the annual allowance and tapered annual allowance in defined benefit schemes – as suggested by the Government's own advisers, the Office of Tax Simplification – is the only viable solution.

'This will not only get doctors back to work caring for patients, but it is also a more cost-effective option for the Government than raising the threshold income.'

He said: 'It will enable all doctors to do as much work as is needed without fear of punitive tax bills and save the NHS significant sums by reducing costs spent on locums and outsourcing to the private sector.

'Crucially, without scrapping the annual allowance in defined benefit schemes, the NHS will continue to haemorrhage doctors at a time when it can least afford to.'

A spokesperson for the Treasury said the department 'doesn't comment on speculation about tax changes'.

Readers' comments (9)

  • Annual allowance is unnecessary. Why punish people for growing their pension at the ‘wrong’ rate in a given year?

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  • I would like to know who advises these people in government.If this is what they are planning, they might as well not bother.

    My form AW8 has gone in.

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  • most GPs don't earn that amount so not sure how that will help. they do know we are leaving because the job is sh##e - right?

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  • Would it encourage me to work longer (in comparison to the current rules)
    No.

    Only completely abandoning the system would make me work longer.

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  • DrRubbishBin

    who earns this much anyway? this is bullshit brought about by people who have no understanding of what the issues are. it will help the super well off and nobody else. the NHS is screwed, its dying and the only way forward is to look after yourself as an individual (as if there was ever any other thing to do) and accept the NHS is never going to be an organisation worth committing yourself to. It's always been parasitic and always will be. Make the most of it that you can but don't base your future on the NHS - it's an utterly appalling employer and always will be

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  • THERE IS A "PROXY WAR" GOING ON AND, AS USUAL, THE TORY MEDIA ARE ACTING TO "TERRORISE" GENERAL PRACTICE INTO SUBMISSION ON BEHALF OF THE GOVERNMENT.

    THERE WILL BE A FURTHER FLURRY OR ARTICLES REGARDING "GREEDY GPs" AS THE TOP CIVIL SERVANTS CONTINUE THEIR "SILLY AND SECRET BRIEFINGS" TO THE MEDIA ON BEHALF OF THEIR POLITICAL MASTERS.

    WHAT KIND OF GOVERNMENT WOULD RESORT TO "TERRORISING" ITS OWN PEOPLE IN THIS WAY....WELL SURPRISINGLY NOT NECESSARY THE USUAL SUSPECTS....

    BUT ONCE THE NAMES OF THOSE WHO ARE BRIEFING THE MEDIA AGAINST GPs GO PUBLIC, THE WHOLE PACK OF CARDS WILL FALL.....

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  • my AW8 has been accepted :)

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  • Even if it became true, all a little late for me....
    Will I get a refund of all my overpayments over the last few years? It would pay off the rest of my mortgage and buy a nice new motor.
    My AW8 has gone in....

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  • I came out of NHS pension last year. I am still paying for pension tax charges over last 3 years currently. Unless you have a surplus of cash in your account to pay tax for the pension that you may get when you are 70 or so, it’s not worth to be in the scheme. At least I can now invest myself and have a control in my own hands return than writing anxiously to listen to the ever changing punitive pension rules. If you are below 50 now , do your sums and you would realise it’s not worth to be in the scheme. If we all come out, government will realise the mistake they have done and likely to listen as it would effect the treasury financially. They would never listen if you try to explain how patient care will be effected as that is not their primary concern.

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