The BMA has responded to the news that the government is asking for views on a potential new pension tax scheme
The BMA says it is highly sceptical of the content of the government’s consultation on proposals for reformation of pension taxation.
The doctors’ union says the proposals must result in tangible reform to the current pension taxation or there will not be an end to the current crisis.
The consultation announced by the health secretary, Matt Hancock, comes after months of lobbying of the treasury and wider campaigning by the BMA for reform to the current pension taxation system.
That system is forcing many senior clinicians to reduce their NHS working hours or retire early because they may face massive pension tax bills for working extra shifts to help reduce waiting lists and or cover vacancies.
Hospital employers are already seeing the impact of this reduction on patient care with patients now waiting significantly longer for treatment which increases the risk of harm.
Whilst the news indicates the government is willing to consider options over and above the scheme known as 50:50, the BMA has repeatedly stated that 50:50 will not solve the problem.
50:50 means that means that doctors reduce their pension contributions to 50% but in return receive just half of their normal pension growth.
But, even as part of the solution, 50:50 isn’t sufficiently flexible and will leave hospital doctors and GPs paying too much tax in some years and getting insufficient pension in others.
Doctors will continue to have little choice but reduce the hours they work for the NHS to minimise the risk of incurring an annual allowance tax charge which can run into tens of thousands of pounds.
The chair of the BMA consultants committee, consultant anaesthetist, Dr Rob Harwood, said,
“This consultation does little other than add to the intolerable dilemma facing many doctors – a commitment to their patients put in jeopardy by these ridiculous taxes which are forcing doctors to effectively pay to go to work.”
“Doctors need to be able to return to doing the additional work they had routinely undertaken in the past to ensure high quality, safe patient care.
“We believe an effective consultation should have explicitly included the option to scrap the annual allowance or tapering annual allowance.
“However, as it stands, the government must recognise there needs to be a full range of scaled pension membership from 10:10 to 90:90, each with recycling of the residual employer contributions.
“A fully-flexible approach, like this, would be cost-neutral to the NHS, because the employer’s pension contributions being given up would be paid as taxable salary.
“Without recycling, a 50:50 approach would be a substantial pay cut for GPs and hospital doctors, and – with such an unattractive offer – almost certain to be set to fail.
“We wanted a consultation that included realistic options to bring an end to this ridiculous, but serious, crisis we are now facing. The BMA believes the only real solution is to scrap the annual or tapering allowances with immediate effect.”