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The recent pay uplift announced by the Westminster Government was incredibly disappointing for our members, and for consultants as a whole across the NHS in England. Not only have ministers failed to recognise or reward the work and commitment of many experienced and senior doctors, they have also taken decisions that will only make the situation much worse.
It remains to be seen what the governments in Scotland, Wales and Northern Ireland will ultimately do but, if they respond in the same way to the DDRB’s recommendations as Westminster, that disappointment will surely grow.
Despite the headline figure of 2.5%, the reality is that the Government has not awarded this recommendation in full. The uplift doesn’t include anything for CEAs, so when they are considered as part of the overall consultant tax bill, the overall rise is reduced to 2.3%.
In fact, many consultants will see a pay cut this year, with only a small number seeing an actual rise.
However, the biggest issue facing consultants is what the rise will mean in terms of their pension and resulting tax charges. As a consequence of the scandalous decision not to backdate the 2018 pay award to April, half of this pay rise will also fall in the 2019 tax year. For many, this will trigger their deemed pension growth and result in an additional Annual Allowance tax charge. This means many consultants will in fact see a reduction in their take-home pay this year.
In my response, I was clear that the Government had failed to ‘recognise the huge additional tax bills generated by annual allowance, and no account has been taken of the high rate of pension contributions’. We know senior doctors are being significantly impacted by the punitive pension taxation and our analysis shows that for many, this low pay rise only exacerbates the problem.
For example, a consultant with 15 accrued years in the 1995 scheme will typically see a net pay rise, after income tax and NI, of £1,505. However, once their deemed pension growth and additional Annual Allowance tax charge are considered, their net pay increase falls to only £200.54 or 0.43% for the year if this is paid to HMRC directly – which of course would come from already taxed income – rather than using scheme pays.
The results are even more stark for those more experienced consultants. For example, a consultant with 25 years accrued service in the 1995 scheme could expect to lose £681.56 a year, a fall in pay of 1.31% overall, and a consultant with 30 years accrued service in the 1995 scheme would typically see their net pay reduced by 2.17%.
While it is not possible to make precise calculations as everyone’s circumstances are different, these examples just go to show that the Government – despite the concerns raised by the profession in the clearest terms last year – has failed to recognise the value of consultants to the NHS. We already know that our members are paying to go to work. Unfortunately, for many, they will today be paying a little more.
If you’re worried about your potential Annual Allowance tax charge you can use the BMA Goldstone Pensions Modeller to help calculate your personal risk and model your pension for future years. You can also read the BMA’s Fast facts document for answers to questions you may have about Annual Allowance taxation.
Rob Harwood is chair of the BMA consultants committee
So...what is the BMA is doing about this?
Aren’t you our negotiating body and So must bear some responsibility for this. You’ve known about this for years. Why haven’t we been balloted on a strike?
It's time for IA. We cant blame our union, it is the apathy of our colleagues who accept the mushroom treatment whilst feathering their nests at St Private who aren't prepared to do anything about it. Half of us have no private income and so many of us aren't prepare to take IA
Just tell Hancock to piss off ! Retire if you can !!
I fully agree that the situation is completely unacceptable but is in line with the gradual decline of the medical profession in the UK. Politicians who were in charge when the pension tax changes were introduced knew exactly what impact it would have on the medical profession. A friend of mine is a tax advisor to governments. He explained 4 years ago what would happen and that it was thought to be acceptable. The medical profession would not do anything and just accept the tax just like they have in the past. I am sorry to say but it is our own fault for not standing up and in this case not putting down our tools. We allow our profession to be made so unattractive, that future generations will not want to become doctors.
The government is already a step ahead of us with introducing Dr. Nurse Consultants and physician assistants. In no time patients will see those professions and not medical doctors. Some patients will suffer, but that is thought to be acceptable in the bigger context. We just need to look at what happened during the winter crises two years ago. Thousands of patients died above what would have been expected even accepting the usual mortality increase in winter caused by flue. The increase of deaths was most likely caused by a lack of hospital beds. The bed number has decreased as a direct result of the year on 5% cost improvement dictated by the government.
If we really want to make a difference than we have to start and accept that patients will suffer now if we strike but future patients may still be able to see a doctor. If we don’t do something decisively now, than we will be complicit in many unnecessary deaths in the future. Is that what we really want? Or is it easier to believe it is the fault of politicians and not us when there is a lack of medical doctors in the future. I don’t think so. I believe it is our responsibility. I just don’t have the energy anymore. So I am planning to either retire early or to leave the UK and work somewhere where I am appreciated and treated with respect.
There isn't any need for a strike. The massive loss of clinical workload to date from those that have dropped to 10PA and the additional loss of activity when those who haven't yet, follow suit, will put more pressure on HMG than any strike would. The issue is AA for everyone, not just doctors and that should be the message. Circumstances are individual and individuals should make their own decisions. It is difficult to spin against individuals choosing to avoid working for free or paying to work. With no ring leaders or groups arguing for industrial action there's no "bogey man or self interested organisation" to focus the public's wrath on. The waiting list increases are a matter of cause and effect, no more, no less. If the Treasury sort out AA ( by massively increasing AA or removing it altogether) then many doctors will be happy to go back to what they were doing before. I imagine it would be more difficult to fight a general election when the NHS waiting lists you're in charge of have rocketed in the last 3 - 6 months, especially when this is as a result of policies brought in by your own party. I'd be a bit worried as a Conservative MP if the Treasury don't sort this quickly, as I'd think my re-election chances will fall as my local hospital's waiting lists go up.
It was compounded by the basis on which the lump sum is calculated. This only makes sense if we can actually take the lump some. The BMA agreed this.
I fully agree with the comment starting with "I fully agree that the situation is completely unacceptable but is in line with the gradual decline of the medical profession in the UK...."
We are small group of helpless people who are not taught how to negotiate in our curriculum. For being in "Noble" profession. we have to rely on public sympathy if we go on strike. I have been part of numerous strikes by the doctors in different parts of the world and all of these have failed. The other main reason why we never win against the government is, we are never united. If for sake of argument we all refuse to pay this punitive tax, HMRC will file a case against all the doctors. It sounds extreme measure but if all the senior consultants do that the government will be on knees and we will not have to plead for public sympathy and can negotiate like equals. Not sure what if it backfires....and whether it would result in more surcharge on top of punitive tax. Unfortunately individuals cannot take this action but under guidance of BMA lawyer, we can "strike" the government differently without going on strike.