Tax plans could hit GPs' pension rise
GPs could find their predicted pension increase from the new contract swallowed by a 60 per cent tax levy, medical accountants are warning.
The Treasury has proposed the tax on pension funds in excess of £1.4 million.
Although GPs do not accrue a fund, accountants said they could still be hit because the Inland Revenue would calculate how much GPs would need to have saved in a private fund to earn their pension.
Actuaries have predicted a £1.4 million fund will currently buy a £53,000 pension.
David Clough, chair of the Association of Independent Specialist Medical Accountants, said the cap 'could become another stealth tax'.
He said: 'GPs' pensions are anticipated to go up by 50 per cent in the next three years but even if it's only 30 per cent it could get close to the cap.'
Dr Simon Fradd, chair of the BMA's superannuation committee, said only a few high-earning GPs may be
affected and even they could avoid the tax.
'Because the employer's contribution is paid through the global sum, you just keep it and stop contributing,' he said.