The BMA has spent the last 18 months fighting to find a solution to the NHS pensions taxation crisis affecting doctors, and it looks like the Government has finally listened in its recent budget announcement. Due to perverse and punitive pension tax rules, doctors have been forced to reduce their hours or the leave the NHS altogether. Some medics have received such large tax bills that they have, in effect, been paying to go to work.
From our own survey of the profession, we know that 42% of GPs and 30% of consultants who responded have already reduced their workloads as a result of these self-defeating tax rules. While, of the remainder, a further 34% of GPs and a further 40% of consultants said they planned to do so. The impact of these pensions tax policies on vital NHS services has been felt across the UK.
Last week, the Chancellor announced an increase in the income threshold at which individuals will begin to be affected by the tapered annual allowance to £200,000, meaning that the majority of doctors will now no longer be impacted on by it.
This move, while welcome, is long overdue. Too many patients have suffered as doctors have faced an intolerable dilemma between treating patients and being charged with exorbitant and unpredictable tax bills. Had the Government acted when the BMA first raised this issue in August 2018, the toll it has taken on doctors and patients could have been avoided.
The budget did not, though, entirely resolve the issue. The Annual Allowance itself still remains and its interaction with the NHS defined benefit scheme (in which people are unable to control pension growth) means that some doctors remain at risk of triggering an Annual Allowance tax charge as a result of a relatively small increase to their salary. Doctors may, therefore, still be penalised for working additional hours.
Doctors may exceed the current £40,000 annual allowance simply following a modest rise in pensionable pay, for example when receiving a pay increment, taking on a leadership role or being recognised for clinical excellence. That is why we will continue to call for an end to the annual allowance in defined benefit schemes such as in the NHS. In addition, the Lifetime Allowance remains unchanged, meaning that many doctors, especially those working full time, will still need to consider taking early retirement.
The BMA will continue to push for these changes so that all doctors can be enabled to work the hours they wish to without fear of being hit with exorbitant and unfair tax bills.
At this moment in time, the BMA believes that the government must put aside all financial considerations and put the health of the nation first in the wake of Coronavirus pandemic.
It is essential that resources are provided to protect doctors and healthcare workers from becoming infected so that they can continue to provide vital patient care. Furthermore, the NHS urgently needs expanded testing facilities in order to allow for infected persons to be identified and isolated effectively as well as improved technology to enable doctors to work from home and also at a distance from patients to avoid cross-infection. Crucially, the greatest expense will be securing much-needed additional critical care beds and equipment including ventilators for patients suffering with severe respiratory illness.
We are facing the most severe public health crisis since the birth of the NHS. The government must now live up the promise made by the Chancellor and take every action and provide all necessary resources to ensure our health service stays afloat during this unprecedented challenging time.
