Scotland’s health secretary has written to the UK chancellor Sajid Javid to urge him to take ‘decisive action’ to reach a permanent solution to the pension tax crisis.
Jeane Freeman warns that the pension tax regime is having a serious effect on staff and health services, with clinicians across the NHS having to reduce their work commitments to avoid punitive tax charges.
‘These impact on the ability to deliver and maintain frontline services, and on the sense of value of our staff,’ Ms Freeman writes.
‘Considerable effort has been expended to date in trying to offset the very real consequences for NHS staff and services of UK Government tax policy.
‘It is, however, clear that a permanent solution is urgently required, and can only be offered by your department. It is incumbent upon you to take the opportunity of the March budget to fully and finally remedy the situation, and allow our NHS staff to get on with delivering care without fear of the consequences.’
Ms Freeman also committed to continuing some form of Scotland-wide mitigation after April 2020 if necessary.
BMA Scottish consultants committee Graeme Eunson (pictured below) said, ‘in that scenario it is vital the Scottish Government continues to engage positively with the BMA to make sure the scheme in place is as effective as possible and resolves some of the limitations of the current interim mitigation scheme'.
He said the letter reflected the serious concerns the BMA had consistently raised with the Scottish Government.
‘The cabinet secretary is absolutely right to point out that it is incumbent on the chancellor to “fully and finally” remedy the position in the UK budget in March.
‘It is an inescapable fact that doctors across Scotland are having to decline extra work due to massive and often unexpected tax bills. This letter shows that reality has really hit home with our politicians and underscores the absolute necessity for tax reform, with removal of the annual allowance when it comes to defined benefit schemes such as the NHS pension scheme,’ he said.
Dr Eunson said the BMA across the UK would continue to campaign as strongly as possible on the need for pensions tax reform.
‘It is good that we have the support of the Scottish Government and personally from the cabinet secretary to do that,’ he added.
The Scottish Government has taken action to mitigate the effect of pensions taxation rules on staff and services inside the financial year, introducing a scheme to allow affected NHS staff to take their pension contributions as part of basic pay. This is intended to provide an alternative to cutting hours to avoid financial penalties.
Find out more about the BMA's work on pensions
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