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Hancock: 'I'm in discussions with Treasury about removing pensions tax taper'

Exclusive Health secretary Matt Hancock has told Pulse in an exclusive interview he is in talks with the Treasury about removing the pensions tax allowance taper that the BMA says is responsible for scores of doctors reducing hours or retiring early.

Speaking to Pulse today, he said that he has been ‘working very closely’ with Chancellor Sajid Javid about the future of the taper, after the Treasury announced a review.

Mr Hancock announced his review into pensions taxes in an interview with Pulse earlier this year after reports of GPs cutting their hours or retiring early because they were paying to work.

However, proposals to offer GPs and other doctors the chance to halve their pensions contributions were not well received and were dropped, but further proposals - which gave even more flexibility in their contributions - were equally poorly received.

The BMA said that the only way to prevent GPs leaving the profession would be to remove the ‘taper’, which reduces the tax-free annual allowance the more an individual earns.

Pulse asked Mr Hancock whether the removal of the taper ‘is something you are going to be looking at?’

Mr Hancock replied: Yes. The Treasury has already announced that it is considering changes to the taper and has a review of the taper and I’m obviously feeding into that.

‘Having originally announced in Pulse magazine that I was talking to the Treasury about this I’m delighted to say that the Treasury eventually under the new chancellor announced a review into the operation of the taper and obviously I am working very closely with them on that.’

He clarified that this would be in conjunction with the ongoing pensions proposals.

Earlier this week, shadow health secretary Jonathan Ashworth told Pulse that he would ‘urgently review’ the current pensions tax situation.

How the taper works

Under current rules, people are allowed to increase their pensions pot by £40,000 per year before incurring a tax charge. 

However, this annual allowance reduces, with those earning above £150,000 per year seeing their annual allowance reduce to a little as £10,000. This £150,000 includes all benefits, such as pensions accrual, meaning that realistically anyone earning £110,000 a year plus their £40,000 tax free pensions accrual will be affected. 

This means that GPs could face an increasing tax charge on their pensions, even if they decide to stop contributing to their pensions part way through the financial year.

The BMA has said that, because of this, any attempts to give GPs flexibility in their pensions contributions - which the Government has proposed - is doomed to fail, as it won’t stop them being punished for continuing to work.

GPs have previously warned that this has led to them cutting their hours or leaving the profession altogether, as well as leading to problems with recruitment and retention.

Readers' comments (24)

  • About time. Most people think fairness is 50/50.
    What is the point of working if your take home pay is less than that or worse, negative? You cannot work harder to meet your commitments and that is fundamentally wrong.
    Just emigrate or let the waiting list rise. No idiot would want to do more work and be poorer.

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  • I HAVE SPOKEN TO SOME UN-NAMED SENIOR GPs WHO HAVE LEAKED THAT THE TREASURY STILL THINK GPs ARE "OVERPAID", THAT THEY ARE OF THE VIEW THAT WE HAVE JUST GOT A 5% PAY RISE FROM THE INDEMNITY SAVINGS WHICH WE SHOULD BE RECYLING BY GIVING THESE "SAVINGS" TO PCNs.

    EDITOR-THIS IS FROM 100% RELIABLE SOURCES..TAKE IT UP WITH YOUR MATE HANCOCK....

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  • Breath. Holding. Not.

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  • Trust non, and no to recycling into PCNs we are having to increase epenses above the 5 % to stand still.PCNs will fail and GP will collapse in less than 1000 days.

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  • When???
    Winter is coming...actually It is here.
    The government has known about this fiasco for years now.
    I have been penalised badly for working hard.
    I do not do out of hours like I used to and now I am actively looking at full time non nhs work for all those annoyed patients who cannot see a gp. Of course this will be in a tax efficient vehicle...but it will at least pay the bills and keep a roof over my family.

    PS the roofer wants £5k to fix a leak. I should have been a roofer or at least married one.


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  • they will not change the taper for one sector of the workforce, and will headline it as 'money-grabbing doctors expect special consideration'; if you can shift work into a 'tax-efficient' folder, then good on you; I find that reducing my hours and profit actually means more take home pay, less tax, and a happier working week; I have worked hard over the years for my family,patients and pension, and am now not prepared to be penalised for doing so any longer. so bollox to hancock, the treasury, and all; just so long as my pension is still there when I get to it !!

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  • It is amazing how often discussions are happening and plans are in place when there is an election coming.

    This has been a problem for 5+ years and you really expect us to believe you when you say it is going to be sorted 4 weeks before an election?

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  • Vinci Ho

    The truth is this is not totally about GPs but to these politicians ,more importantly , the consultants refuse to work more as well. Of course , we are f***ing overpaid because we are not hospital consultants.
    Remember that quintessential, hypothetical dilemma about saving your mother or your wife ?
    Ask these politicians, which one would they save when both a GP and consultant are drowning?😈😂🤨😄😅👿

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  • Imagine those discussions go something like;
    Handcock: Can we do something about this Pension tax thingy?
    HM Treasury : There’s a no in the post for December 13th.

    Only when we are gone are we missed. So go.

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  • JFDI (just do it)

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