It is clear that the now-scrapped proposal — the 50:50 option — did not go far enough to address the issues that are now having an impact on NHS performance and patient care.
But the new proposals look to be a bigger step in the right direction. The BMA reports that “it is good to see the government finally sitting up and taking notice”.
Here at Wesleyan, we welcome the decision to shelve the recent consultation – in our view it was inadequate and only papered over the cracks.
But we still believe that the government should scrap the tapered annual allowance at the earliest opportunity.
It is overly complex and leads many doctors to sleepwalk into paying huge tax bills.
In-demand medical professionals are telling us that they are not only confused by the scheme but are also badly affected by it financially.
Some are paying effective tax rates of more than 100 per cent and many consultants who are doing non-pensionable overtime are effectively paying the government to go to work, while receiving no extra pension benefit.
It is therefore unsurprising that medical professionals are cutting the amount of work they are doing, or even retiring early.
In our view the new proposals will do little to ease the current complexity of tax planning and, if anything, could make it even more complex for doctors.
Nonetheless, the government’s promise to consider providing much greater flexibility over how doctors and other senior clinicians save into their pensions is encouraging and the government’s fresh ideas represent a big improvement on the current position.
At Wesleyan it is our job to help NHS professionals navigate through tax charges like this but when it is affecting patient care, we believe that the time has come to tackle this on-going problem now.
We await the new consultation with great interest.
Parminder Gill is advice policy consultant at Wesleyan, a specialist financial services mutual for GPs and Hospital Doctors
