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GP pension tax bills to be paid by the NHS in winter

The NHS is to pay doctors’ extra pensions tax bills under Government plans designed to prevent shifts from being left unfilled this winter. 

Health secretary Matt Hancock is expected to instruct NHS officials to roll out the plans imminently, following fears that a winter crisis will become a reality if doctors continue to reduce their shifts in a bid to avoid the charges. 

Although not yet finalised, the proposals are on track to be presented by NHS England as an operational decision, according to The Times, which revealed the plans.

Pulse understands the proposals will include GPs’ tax bills. 

The proposals come despite the pre-election period of purdah – in which Government announcements are usually discouraged – potentially causing controversy. 

GPs have said the proposals are a short-term fix for the winter, but further reforms are needed to tackle the ongoing high charges applied to doctors who hit the limit for tax-free annual pension pot growth.

This comes days after Mr Hancock exclusively told Pulse that he’s in discussions with the Treasury about removing the pensions tax allowance taper that the BMA deem responsible for scores of doctors reducing their hours or retiring early.

It also follows the BMA’s warning that this winter is anticipated to be the worst in NHS history.

Almost half of GPs and 30% of consultants have cut their hours over fears of being hit by the pension taxes, according to a previous BMA poll.

Dr Chaand Nagpaul, BMA council chair, said: ‘The BMA has been in active discussion with NHS England about what short-term options, including this interim measure, could be implemented to allow doctors to resume additional work over the coming winter period.

‘These proposals under discussion could, if properly implemented, provide the respite needed to enable significant numbers of doctors to increase the work they are doing, giving vital patient care at a time of unprecedented demand.’

He added: ‘However, we don’t yet have important details about how the such a scheme will work; details that are crucial to the BMA and to the tens of thousands of doctors that we represent in order to provide the necessary reassurance that doctors can take on additional work without this resulting in any financial penalty.’

Dr Nicholas Grundy, chair of GP Survival, which has been campaigning against the charges, said: ‘This will hopefully increase medical staffing through the winter, but is not a solution to the underlying problem: tax rates in excess of 100% will continue to exist until the annual allowance taper is abolished or reformed.’

At present, the annual pension allowance limits the amount people are allowed to increase their pensions pot by to £40,000 before incurring a tax charge.

The allowance is also reduced where individuals earn a yearly net income exceeding £110,000 – or an adjusted income exceeding £150,000 – with the taper stopping at a minimum annual allowance of £10,000.

In September, NHS England chief executive Simon Stevens called for ‘significant further action’ to ensure the sustainability of GP services, while the Department of Health and Social Care admitted that ongoing pension issues were incentivising a third of GPs to refuse shifts.

But the Government’s proposed changes to the NHS pension scheme have been heavily criticised by the BMA, which described the plans as a ‘temporary sticking plaster solution that won’t fix the pension tax crisis’.