Chancellor overlooks GP pension tax allowance in Spring Budget statement

The pension tax allowance for general practice failed to get a mention in the Spring Statement.
 
Outlining the Spring Budget today in the House of Commons, Chancellor Philip Hammond did not speak of the current pension taxation policies and their impact on GPs, despite the Government previously suggesting it would address the issue and the BMA yesterday calling for an announcement in today’s Spring Statement.
 
In January, health secretary Matt Hancock told our sister publication Pulse, where this article was first published, that he was in discussions with the treasury over changing the tax treatment of pensions due to the effect on GP retention, saying it is the ‘biggest concern’ GPs raise with him.
 
And earlier this month BMA GP Committee chair Dr Richard Vautrey warned that younger GPs are being advised by their accountants to cut clinical hours to avoid extra pension charges.
 
He said both the BMA and NHS England have been raising the issue with the Treasury, and are calling for changes to the pension scheme to ensure GPs can continue seeing patients without being worried that they are effectively paying to work.
 
However, Mr Hammond made no mention of any measures to provide greater tax relief for GPs in terms of pensions.
 
In a letter sent to the Chancellor yesterday, BMA council chair Dr Chaand Nagpaul said: ‘I write ahead of the 2019 Spring Statement and on behalf of the BMA to once again highlight the significant impact of current pensions policies, including the lifetime allowance (LTA) and tapered annual allowance (AA), on the NHS workforce.
 
‘I ask that you include reform of these punitive pension taxation polices within the Spring Statement. We believe that such reform will improve recruitment and retention across the NHS workforce, and support doctors to continue to deliver care to patients throughout their working lives.’
 
He added: ‘We are deeply concerned that doctors across all branches of practice, working across the NHS, are facing the dilemma of incurring a disproportionate and ever-expanding pensions tax bill or cutting short their service to the NHS, reducing hours or turning down additional work, much of which is carried out to reduce waiting times and ever-growing clinical lists. This can only be to the detriment of patient services.’
 
The GP partnership review – released in January – found that tax charges are a common factor for GPs deciding to reduce their clinical commitment, retire early or opt out of the NHS Pension scheme.
 
Pulse revealed last year that 3,000 GPs have claimed their pension early since April 2013, in part because of pension tax issues.
 
Meanwhile, Government figures show the number of GPs retiring before 60 has slowed down, with 588 GPs in 2017/18 – compared with 721 in 2016/17 and 695 the year before – the lowest number claiming their pension early since 2011/12.
 
This story was first published on our sister publication Pulse.