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No details about how GPs’ winter pension tax charges will be paid, warns BMA

Details about how NHS England will pay GPs’ pension tax charges this winter have still not been revealed despite the changes having been announced two months ago, the BMA has warned.

Stop-gap proposals approved by health secretary Matt Hancock in November were aimed at ensuring doctors could take on extra shifts without being charged for breaching their annual tax-free pension limit. 

GPs and other doctors should be able to defer the tax charges this winter by making use of a ‘scheme pays’ option when submitting pension forms from April onwards, so that the NHS later pays for the costs at the point of retirement.

But the BMA said NHS England had so far provided no information on how the policy would work ‘despite repeated requests’ – and said the delay meant GPs will be ‘hesitant’ to take on extra work. 

NHS Business Services Authority (NHSBSA), responsible for handling pension forms in England and Wales, also told Pulse it had ‘no indication’ to date as to ‘what all of this means in terms of administration’. 

GPs added it was ‘extremely worrying’ there were no details so far – and echoed concerns previously raised by the health secretary that the stop-gap plans could constitute tax avoidance.

A BMA spokesperson said: ‘NHS England and Improvement made a commitment to deliver this short-term fix for GPs facing pension tax charges this winter, but despite repeated requests they have so far failed to provide details of how it will work.’

They added: ‘While we have been given a commitment that this scheme will apply to general practice, it’s understandable that, without details on precisely how it will work for those in primary care, GPs will be hesitant to commit to extra work this year that could risk triggering significant annual allowance charges.

‘This is why we continue to push for these details, so that family doctors can get back to treating patients.’

NHSBSA said it had had some interest from NHS pension members wanting to use the ‘scheme pays’ option – which will be available to doctors from April – but had no information about how the policy would work. 

An NHSBSA spokesperson said: ‘We have already seen communication from members that suggests they intend to use the “scheme pays” option because of payment redress but at this time we have no details as to what this means, in terms of numbers and administration.’

GP Survival chair and pensions expert Dr Nicholas Grundy said he fears the proposals could potentially constitute tax avoidance.

He said: ‘It’s extremely worrying that there’s still no detail around how scheme pays will work.

‘Dealing with the annual allowance tax charges is a significant, complex workload on NHS staff already, and adding in a loan to defer the problem until retirement, in a way which no one appears to understand and for the 2019/20 year – which may constitute tax evasion – does not encourage NHS staff to take on more work. I’ve just reduced my sessions as a result.’

NHS England previously confirmed it will work through a ‘detailed implementation mechanism’ with GPs and GP representatives to achieve the ‘intended’ benefits.

Meanwhile, the Government has begun its review of how problems with pension tax charges can be resolved in the long term, with unconfirmed reports suggesting it will raise the threshold income at which high earners see their tax-free allowance tapered.

NHS England has been approached for comment.