BMA says Government has ‘finally listened’ to months of lobbying to fix pension taxation crisis and improve patient care

by BMA media team Press release from the BMA.
Location: UK
Published: Wednesday 11 March 2020
Contract and pen article illustration

Responding to the Chancellor of the Exchequer’s announcement on pension taxation reforms, the chair of the BMA pensions committee, Dr Vishal Sharma said:

“Today’s announcement shows that the BMA, which has fought tooth and nail for 18 months to find a solution to the pensions taxation crisis, is at last, being listened to. An increase in the threshold income of all workers to £200,000 demonstrates that the Government has heeded the warnings from the BMA and finally taken account of the evidence we have presented.

"The vast majority of doctors are now removed from the effect of the taper and will no longer be in a situation where they are 'paying to go to work'. But this solution is long overdue. For the past 18 months patients have suffered, and doctors have faced an intolerable dilemma with many forced to cut short their service to the NHS, reducing hours or turning down vital additional work – not being able to care for their patients as they would want to.

"From our own survey of the profession we know that 42% of GPs and 30% of consultants who responded have already reduced their workloads. While of the remainder, a further 34% of GPs and a further 40% of consultants plan to do so. Had the Government acted when we raised this in August 2018 the impact on doctors and patients could have been avoided.

"Today’s announcement is not everything that we asked for. We believe that the annual allowance is unsuited to defined benefit schemes such as the NHS. Many doctors with incomes far below the new threshold income will face tax bills as a result of exceeding the standard annual allowance which remains at £40,000.

"This can happen 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. In addition, there is no change to the Lifetime Allowance and many doctors will still need to consider taking early retirement. Furthermore, there remains an essential requirement to speed up the delivery of information to GPs about their annual pension contributions.

“Raising the level of the threshold income for all workers, including those in the private sector, will ultimately prove more costly to the Treasury than the BMA’s proposed solution of removing the annual allowance from defined benefit pension schemes, a proposal also suggested by the Government’s own independent advisors, the Office of Tax Simplification. However, the fact that Government has committed to significant taxation reform demonstrates that our campaigning on behalf of members has been effective and will help the majority of doctors.

“In the coming days we will be considering our full response to the Government’s announcement and raising those issues that remain unresolved. For example, it is essential that the recycling of employer contributions is mandated for those NHS staff forced to leave the pensions scheme as a result of pensions taxation. In addition, it is vital that these staff can retain their death in service and ill-health retirement benefits.”

Notes to editors

The BMA is a trade union representing and negotiating on behalf of all doctors in the UK. A leading voice advocating for outstanding health care and a healthy population. An association providing members with excellent individual services and support throughout their lives.

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