The NHS in England is to cover the additional tax bills encountered by doctors in an attempt to encourage them to work overtime, according to reports.
Senior clinicians have been turning down additional shifts to cover resourcing gaps because they faced increased tax bills, following changes to the annual tax allowance and the NHS pensions scheme.
Public sector pensions
A consultation published in September proposed several options to give clinicians more flexibility over their pensions, which would allow them to work extra shifts without facing financial penalties. If taken forward, clinicians would be able to set the exact level of pension accrual at the start of each year in increments of 10 percentage points – for example, 30% contributions for a 30% accrual rate.
With doctors continuing to refuse additional work, senior NHS figures and ministers have agreed a plan for the 2019-20 tax year to allow staff to take money out of their pension pots to pay the tax bills they receive next year. The NHS will then reimburse their pension funds before their retirement, allowing the organisation to spread out the cost of the initiative over time and ensuring that staff are not left out of pocket.
However, Chris Hopson, chief executive of the hospitals’ representative group NHS Providers, told the Times that it was frustrating that managers were excluded from the plans. He said: “We also know that some trusts are concerned about adopting solutions that benefit only the most highly paid when other groups of staff, including the lowest paid, are also seeking help with their pensions issues.”
A temporary plan to alleviate the changes to the pension tax charges has been agreed in Scotland. From 1 December, NHS staff will have the option to have their employer pension contributions paid to them as part of their basic pay, helping to offset the additional tax bills they face if they work overtime.
The plans were cautiously welcomed by the British Medical Association, but it said action was needed across other parts of the UK.
BMA Scottish consultants committee chair Graeme Eunson said: “Our main message remains the same – that the Treasury must recognise the damage the pensions’ tax system is doing to the health service and reform the tax system so that we can just get back to looking after our patients without worrying that going the extra mile is going to cost you tens of thousands in unpredictable pensions’ tax.”