NHS to pay doctors’ pension tax in bid to end workforce crisis ahead of winter

The NHS could be set to pay doctors’ pension tax bills in a move the BMA says could ease pressure on the health service ahead of a winter predicted to be its worst on record

This is an edited version of an article first published by GPonline.

Doctors’ leaders and accountants have been warning for months that the government’s failure to address the impact of tax penalties on pension contributions on the NHS workforce would severely undermine capacity. Now the BMA believes the health service is now heading for its most difficult winter ever.

A damning report published earlier this month showed that NHS organisations across the UK were struggling to maintain services as doctors across multiple specialities were forced to reduce working hours or refuse extra shifts to avoid heavy tax penalties.

Reports emerged on Monday that NHS England was set to tell doctors in England that their tax bills would be covered by the NHS. The BBC reported that doctors would be able to ‘take money out of their pension pots to pay the tax bills they get next year’.

NHS pensions

It reported that the NHS ‘will then top up their pension pots before retirement, meaning the cost of the measure to the health service will be spread out over time while doctors will not be out of pocket’.

However, one leading specialist medical accountant warned that the plans looked ‘rushed out and chaotic’, and said it remained unclear whether the proposal would only apply through the coming winter, and to what extent doctors would benefit.

BMA chair Dr Chaand Nagpaul said: “The BMA has been in active discussion with NHS England about what short-term options, including this interim measure, could be implemented to allow doctors to resume additional work over the coming winter period.

“These proposals under discussion could, if properly implemented, provide the respite needed to enable significant numbers of doctors to increase the work they are doing, giving vital patient care at a time of unprecedented demand.

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Financial penalty

“However, we don’t yet have important details about how the such a scheme will work; details that are crucial to the BMA and to tens of thousands of doctors that we represent in order to provide the necessary reassurance that doctors can take on additional work without this resulting in any financial penalty.

“We look forward to having those details in the very near future, and call on the next Government to urgently scrap the annual allowance in defined benefit schemes such as the NHS, a solution proposed by their own advisory body, the Office for Tax Simplification.”

Plans to cover the cost of soaring tax bills for doctors in England came as the Scottish government announced its own interim plans to tackle the pension tax crisis.

The Scottish government said that ‘from 1 December 2019, an interim policy will give eligible NHS staff the option to get their employer pension contributions paid to them as part of their basic pay.’

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