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Government still finalising pensions tax scheme details for GPs

Details of pension scheme arrangements that will allow GPs to avoid tax charges are being finalised by the Government, after it confirmed the details for hospital doctors. 

In a statement, health secretary Matt Hancock said ‘each affected clinician’ is being contacted by their NHS trust employer, with the terms and conditions of the pension scheme changes on offer.

The details for GPs are still understood to be under developement, as NHS England says it is working through the ‘detailed implementation mechanism’.

However, it has clarified that GPs will use the ‘scheme pays’ arrangement already available to NHS pension scheme members, which usually allows tax charges to be deferred until retirement – but under new plans the NHS will pay for the deferred charge.

It also confirmed that all pensions tax charges will be paid for this financial year, and not just those relating to additional shifts. 

Mr Hancock reiterated that the plans meant clinicians are ‘immediately able to take on additional shifts or sessions without worrying about an annual allowance charge on their pensions’.

Mr Hancock said in a statement: ‘The scheme involves employers making binding contractual commitments to be given to every affected NHS clinician so as to ensure that this commitment is honoured.

‘Full details of the terms of the payment arrangements are set out in letters that are being sent to each affected clinician by their employer including the terms and conditions of the offer.’

He added: ‘This contractual commitment contains the provision that in order for it to be operative, the affected clinician must make a Scheme Pays election in relation to the tax charge for 2019/20 only relating to accrual in the NHS Pension Scheme excluding 2019/20 additional voluntary contributions that is accepted by the NHS Business Service Authority.

‘These binding contractual commitments will provide for payment to be made when the clinician takes their pension, at which point the employer (or its successor) will be liable for the payment. NHS England has undertaken to provide funding to the employer (or its successor) in respect of those liabilities as the payments are made.’

The BMA said in a statement it is ‘satisfied’ the details of the proposals ensure clinicians opting for the new ‘scheme pays’ arrangement will have ‘a legally binding, contractual entitlement that is backed by UK government, to receive these payments.’

It aded: ‘As such clinicians will not be financially disadvantaged should they incur an annual allowance tax charge resulting from their NHS pension scheme in 2019/20.’

However it added it was ‘essential’ that doctors working in primary care are covered by the proposals: ‘NHS England  have committed to ensure that is the case and the BMA will work with them to ensure a solution is found to provide similar guarantees for GPs.’