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As we enter a new decade, it is unclear what is in store for us as we continue on our journey to stand up for doctors’ terms and conditions and support them in delivering the best possible care for patients. Like the weary commuter, doctors and patients have been shuffled from one overcrowded service to another.
Shocking figures released today reveal that A&E waiting times are the worst on record with more than one in five people waiting more than four hours to be treated and over 2000 patients waiting more than 12 hours for a bed. The NHS is at crisis point and the Government needs to take urgent action.
Fixing the ludicrous pension taxation system is an obvious start and something that can be implemented almost immediately. At a time when the NHS is on its knees, these perverse taxation rules are forcing doctors to reduce the amount of work they do for the NHS and our patients. For almost two years the BMA has lobbied government about the danger of the punitive pension taxation charges made up of the annual allowance, taper and lifetime allowance.
You, our members have been with us for every step of this journey. Our destination remains unchanged – removal of the annual allowance in defined benefit schemes. This is the only effective long-term solution and this suggestion is echoed by the Treasury’s own advisory body the Office for Tax Simplification.
Although it has been slower than we would have liked, we are making progress. The Government’s initial response was to insist that the current pension taxation system was fair and necessary in order to ‘limit’ tax relief. However, as a direct result of our efforts, the Government not only conceded that these pension taxes are a problem for the NHS but have also admitted the scale of the problem. This is not an issue affecting the occasional clinician, the effects are widespread, affecting the majority of clinicians in every hospital, primary care doctors in all UK geographies, our armed forces and also our universities – anywhere doctors work, that provision is being undermined by the UK pensions system.
As we enter 2020, we hope we hope we have reached the final leg of this journey. In its pre-election manifesto, the BMA outlined the urgent need for a resolution to this crisis. The Conservative manifesto pledged to review the situation in the first 30 days and to engage with the BMA whilst doing so.
Immediately after the election, the BMA wrote to the Prime Minister and the Chancellor to ensure that this commitment is enacted and we have now received confirmation from the Chancellor that the review is underway, led by the Economic Secretary. The BMA will be meeting with him shortly. The outcome of this review will be announced in the upcoming Budget on 11th March and the BMA are clear that the necessary reforms need to be in place for the start of the next tax year.
This is encouraging but ‘a review’ is not the destination. The annual allowance is fundamentally unsuitable for defined benefit schemes and we are doing all we can to demonstrate to the Government why removing the annual allowance, including the taper in defined benefit schemes, is the ONLY long-term solution. We need you to continue to help us tell your individual stories – by using our ‘write to your MP tool’ to let your local MP know how these taxes are impacting you, your trust and your patients, and calling on them to tell the Chancellor what the solution is.
We will keep you updated as the situation progresses, this has by no means been an easy journey, but it is clear that we are going in the right direction and we, with your help and support, will do all we can to steer the government to the right destination.
Vish Sharma is chair of the BMA pensions committee
Good to see this progress and it's great that the BMA has been so active in addressing this problem. Many medical staff have already paid a high price for this tax policy, so will this lead to an agreement that will have retrospective effect?
We are very grateful to the BMA for trying to remedy the pension taxation issues. Many senior colleagues have already paid very significant amounts of money as a result. In the interest of fairness to all concerned, whatever agreement the BMA is able to achieve should in the opinion of many be applied retrospectively. Thank you
Agree people should be reimbursed or scheme pays tax charge waived.
the scheme pays costs more than the annual self pay, but the annual self pay is prohibitive for most. even worse, the promised pension we all signed up to becomes 10s of thousands less per year as a result of this nonsense. keep going BMA!!
BMA are making laudable effort toward recognition by the great and the good that existing Pension taxation / annual “allowance” is a purely punitive measure for a group of Professional staff. On the one hand there is talk of desperate shortages of accredited medical staff to deliver “promised” services, on the other, draconian Taxation measures imp action on staff retention. Amazing zeitgeist indeed!!
I left the NHS 2 months ago, a few years early, after many decades of devoted service. The pensions crisis and the bill which I deduced that I was was likely to receive (if and when the nhsbsa finally got round to me, after ignoring repeated requests for pensions tax information for a couple of years) were a major final trigger in my sudden retirement from the NHS. I love seeing patients but this was the last straw after being treated badly by management for many years, and my specialist area having being undermined and then withdrawn. I have since paid a large extra tax bill and now will never go back, although I had a very strong NHS vocation. I worked many unpaid hours for 32 years and would have continued to do this had this not happened. I am also part of the generation whose pension age was changed overnight from 60 to 67. I do not feel valued.
I agree that sums already paid for the Annual Allowance tax charge must be reimbursed to be fair and equitable. I am a GP, and have reduced my hours by half since receiving a £23 000 AA tax bill. I am reluctantly considering retiring early from the NHS, unless the AA and Lifetime Allowance charges are removed. I am sure there are many others in a similar situation.
This needs sorting ASAP. Once sorted it is vital that those of us are not left out of pocket. To date I have paid extra tax and left the scheme for 12 months over 2 tax years to try and mitigate tax risk. Why should I be out of pocket if they change the rules which is in effect an admission that they were wrong? This needs sorting quickly. There are many, including myself, that are thinking of leaving or seeking employment elsewhere. Personally if there is no light at the end of the tunnel by mid-2020 I will be seeking employment elsewhere (plans already in place). There are many others like me.
Lifetime allowance is also a huge issue with people dropping hours to try and avoid paying 55% tax on pension excess, the BMA needs to try and sort this as well
Those who have had recurring AA tax charges dating back to 2017/2017 should be reimbursed. The LTA excess tax needs addressing. Some have become deferred members of the pension scheme and their situation should not be forgotten: it is a hard decision to give up benefits.
The stress that doctors have experienced as a result of all of the above whilst trying to carry on as professionals along with their other personal roles (parents, spouses etc), cannot be underestimated.
they will never back date it. Also anyone with any insight did things to avoid, reduce this. So should they be pay extra because they had sense and did not apply for points or do the extra work because they had their eyes open.
It is little known that those who retire on ill-health grounds pay a large AA charge too (unless in 20s/30s )and are also debarred/penalised from working in any way e.g. intermittent, few days a year for any thing even vaguely connected with NHS. Those who retire young on a small pension (remember with a serious illness) cannot supplement their small pension with any kind of work with NHS/medical charity/medical school because of rules. Many do not get any help from benefits system either. Pension system needs overhaul with remit of retaining skills and experience. And yes women have had pension age increased from 60 -67 0 hugely significant in those unable to work with illness.
I have no confidence that the Pensions issue is going to be easily resolved. In large part this is because the BMA has, since these new rules came in, had little or no understanding of how the system actually works and the fundamental differences between GP pensions and secondary care doctors. Non of the articles published (even recently) by the so-called accounting experts and committees explain cogently how the system works. Possibly one of the most important points being how the "growth" in the individual's NHS pension pot is calculated. Many people are under the impression that this growth is only based on the amount paid in i.e. their input contribution - rather than the growth of the pot as a whole in the annual period. The pensions rules and how they are applied are very complex - not least because they came into force before NHS Pensions even understood them. As a GP (who has now retired early, largely in part to the pension problem), I was hit with a 6 figure pension tax bill more than 4 years ago - it took months to sort out and still was close to £80k. The only option was to immediately leave the Scheme... and subsequently stop being a Partner and virtually step away from the profession. With no further contributions, because of the LA and AA penalties, money that could have gone into the pot was, of course, taxed at the normal higher rate - but at least it was from money that had actually been earned rather than the unfathomable growth calculation. Publicly, it is arguable that it would be nice to also be a high earning GP and to stop moaning. At the very least it is time the BMA got its facts and act together before more doctors leave and loose even more public support.
The problem is we are not getting the figures and it is based on growth. The older you are the more you pay
I don’t know whether to stay or leave the pension scheme
I am being penalised for working hard.
How can you pay tax on something you don’t have ?
Scheme pays is just a loan so you can’t work that one out either and how it affects your final payout
Why not just deduct at source ?
I think everyone is hoping it will just be written off but I don’t see it. We don’t even know about 2020.
I suspect the best options are retire if you can or move abroad if you can