It is good that Jeremy Hunt has acknowledged that the reforms to pension tax relief have affected GPs.
From April 2011, people with more than £1.5m in their pension funds have had to pay a tax charge on everything over and above that £1.5m. This has affected both average and higher earners.
The Government also levied a tax charge if an individual’s annual contributions are deemed to be more than £55k. This mainly affected higher earners, but there are rumours the annual limit will be reduced further in the Chancellor’s Autumn statement next month.
The extra tax can be paid when they start drawing their pension, provided the tax charge is above £2,000 – meaning what they don’t see, they don’t miss, provided they end up with a pension they are happy with.
Mr Hunt might want to ask medical accountants for some live calculations. There are some horror stories around for GPs.
As for the tiered approach, any move towards a flat structure would help higher earners.
Mike Gilbert is a consultant at RMT Accountants