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The situation regarding pensions taxation is rapidly evolving. We understand that, following the Government’s announcement that they were undertaking a review of the tapered annual allowance, it may appear that things have gone a little quiet. However, this is very much not the case, the BMA has been working tirelessly behind the scenes to ensure the Government understand the issues and implement the correct long-term solution.
We have extensively engaged with Government, individual members of parliament and others who can influence change and help us secure our goal of removing the punitive tax burden from those in the NHS. Doctors and other healthcare professionals must be allowed to get back to providing the essential care our patients desperately need.
Following our meeting with the Treasury earlier in the year, we have discussed the issues of pensions taxation at many meetings with both the secretary of state for health and the responsible health minister, Edward Argar. They clearly understand the effects that pensions taxation is having on the NHS and we continued to outline why we believe the best solution remains to scrap the annual allowance in public sector defined benefit schemes.
BMA national clinician adviser on pay and pensions Tony Goldstone and I also had an extremely productive meeting with the IFS (Institute for Fiscal Studies). The IFS were clear that the current pensions taxation system was not fit for purpose. They were absolutely supportive of the principle that earnings should only be taxed once – not multiple times as occurs with the current pension taxation arrangements. As they commented in a recent Times article, they don’t believe that raising the threshold income will solve the current crisis.
Going forward, we continue to press our case around change to pensions taxation. We have arranged numerous meetings with individual MPs over the next few weeks, and to date over 1000 members have used our letter writing tool to tell their local MP how pensions taxation is affecting them and their patients. We have also engaged with other stakeholders such as NHS Providers, the royal colleges and NHS Employers. In addition, we have prepared a detailed briefing on the pensions issue explaining why the best solution remains scrapping the annual allowance in defined benefit schemes.
The impact on doctors, and therefore their patients, of annual allowance taxation remains a widespread concern. Our media team receive numerous queries from the national media and the BMA are the leading point of contact for the press whenever there is a story around pensions and the NHS. In January alone the BMA was featured in a range of publications including The Daily Mail, The Times, Financial Times, Pulse, and GP Online commenting on the pensions crisis and the necessary solutions.
We are expecting the outcomes of the review to be announced at the Budget on 11 March. We will continue to do all we can to ensure the Government implement the correct long-term solution. However, we are clear that if the solution isn’t the right one for the NHS – we must continue to highlight the issue and do everything possible to ensure we secure the solution we and our patients desperately need.
Vishal Sharma is the BMA pensions committee chair and consultants committee deputy chair
Great to hear of this work - it is imperative that NHS ill-health retirement pensions - entirely unfit for purpose are highlighted in these discussions
Thank you very much up dating and thank you for all your efforts. Hope, the government listens to our concerns and take appropriate and immediate action.
Fantastic work, Vish, and very much appreciated by my colleagues at Lewisham and Greenwich Trust.
Do we have any update around the unlawful age discriminatory transfer to the 2015 scheme that the firefighters union successfully achieved, and what will that mean for those who received AA tax bills between 2015 and now
Too late....the ingrained psychology of “NHS service” has been fundamentally disrupted and the next generation want to work flexibly. Too many colleagues enjoying the enforced free time - best of luck getting that service back.
THANKS, FOR ALL YOUR EFFORTS-
LET'S HOPE THE GOVERNMENT DOES THE RIGHT THING AND IMPLEMENTS THE LONG TERM SOLUTION.
Very grateful for your efforts Vishal.
Why is IA not an option?
BMA appears to have taken a lead and hopefully this will be sorted. 1) The tapering allowance scheme should be scrapped. 2) With the long waiting times BMA should encourage Government to incentivise people who work hard and take on additional work in the best interest o patient care as seen in some countries ex- Singapore. This would encourage Doctors to work longer hours with no punitive taxation & on the contrary would encourage more people to work longer duration 3) Avoids early retirement thereby NHS doer not loose out experienced Doctors who have worked for 25 - 30 years.
I have just committed 81k pension tax bill to Scheme Pays at a high interest rate. Sleepless nights and distracted for months, plus high fee to IFA who was not exactly convincing. I wrote to Philip Hammond last year and got the bland political response that shows no-one cares.
Forced out of pension scheme now so lost protection, forced into 2015 scheme, not sure that BMA have actually changed a thing yet.
Junior colleagues need to consider if a lifetime in NHS is worth the pressures when you're in 50's.
I am a full time acute Consultant with heavy on call clinical workload.
Pension fund double taxation is the final straw.
Great work Dr Sharma and BMA
Not sure the BMA should be publicly patting itself on the back over this.
This could hardly be a bigger crisis for the members that pay for the BMA. As a recipient on a 51k pension tax bill this year (making my total tax bill this year more that 75% of my income) I’m faced with remortgaging my house for the privilege of working for the public.
This shambles has been a slow motion plane crash for some years now and the BMA should be apologising for its lack of real effectiveness. We don’t need jam tomorrow-we need results today
Just received my Notice of Tax Coding 2020 from HMRC. My Tax code is K104. To 99.99% doctors, this would mean nothing. Being a financially savvy person, I know this is a NEGATIVE tax code. £1050 is ADDED to my salary before tax is applied - I have a NEGATIVE personal allowance . Classic case of STEALTH TAX. Well done Mr. Javid and Hector the taxman for conning the people without them knowing. Gave up doing extra shifts many years ago and now contemplating early retirement. I am only 55 and have been a consultant surgeon 22 years.
Forgot to say, I am PAYING to go to work. I pay tax BEFORE I even get out of bed everyday on income I have not yet earned!!
Being a surgeon, I am good with my hands. In retirement, will probably take up carpentry or clock-making as a hobby .......