Intended for healthcare professionals


NHS will reimburse next year’s pension tax bill on retirement, doctors are told

BMJ 2019; 367 doi: (Published 19 November 2019) Cite this as: BMJ 2019;367:l6595
  1. Elisabeth Mahase
  1. The BMJ

Doctors in England will be encouraged to pick up extra shifts this winter with the promise that the NHS will reimburse them for any additional tax they accrue as a result.

Under the offer, whose announcement by NHS England is imminent, GPs and hospital doctors can use their existing pension pot to pay off next October’s pension tax bill on the understanding that the NHS will reimburse them when they retire. It is a one-time offer that will be available only for the current 2019-20 tax year.

The offer comes a week after doctors were warned that the NHS faces a “bleak” winter, after figures showed that in October the NHS had its worst ever performance on key waiting time targets.1

The move is reportedly being pushed through by the health and social care secretary, Matt Hancock, to encourage doctors to work overtime through winter by removing the fear that they will be hit with a large tax bill for exceeding their pension annual allowance.

The announcement is due to come despite purdah rules. Under these pre-election rules, the government should not announce new or controversial initiatives that would be seen as advantageous to a party or candidate in the upcoming election.

Under the plan, all frontline clinical staff will be able to choose the “scheme pay” option when their pension tax bill arrives next October, meaning that they will use their pension pot to pay the bill. This is an option that is already available to doctors, but under the new offer the NHS will reimburse doctors when they retire through a supplementary payment.

The BMA’s chair of council, Chaand Nagpaul, said that the proposal could provide a short term fix but emphasised that the full details had not yet been released. “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,” he said.

“However, we don’t yet have important details about how such a scheme will work—details that are crucial to the BMA and to the 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.”

Meanwhile Derek Alderson, president of the Royal College of Surgeons of England, said that the solution would remove the financial penalties facing surgeons who wanted to work extra hours to help cut waiting times. “As winter approaches, it is crucial that the NHS can operate at full capacity and that consultant surgeons and hospital doctors are not penalised for working extra hours.”

Although the one year proposal will apply to clinical staff working in England, doctors in Scotland will also be given a short term solution to their pension problems. From 1 December 2019 to 31 March 2020 NHS Scotland will give eligible NHS staff the option to have their employer pension contributions paid to them as part of their basic pay.

This aims to stop staff cutting their hours to avoid going over their pensions cap and facing tax bills. It will be available to all staff who can prove that they are likely to breach their pension annual allowance in the 2019-20 financial year and thus incur a tax charge.


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