SCOTLAND’s Health Secretary has backed moves to end a “tax trap” that stops senior NHS staff taking on extra shifts.
Jeane Freeman has offered her support for urgent action after the UK Government announced a public consultation proposing full flexibility over the amount which senior clinicians put into their pension pots.
BMA Scotland has called for a short, sharp review of the complex rules around these annual allowances. It is thought better paid clinicians, doctors and nurses, face tax disincentives when they work more. They can, it has been suggested, take home more if they work less.
This is because of a 2016 rule which limited how much pension pots could grow without incurring tax for those earning above £110,000.
Ms Freeman said: “Earlier this week I wrote to the Chancellor of the Exchequer to ask him to take urgent action on this and undertake a review at the earliest opportunity.
“I wish to personally assure all staff of NHS Scotland that I fully value the work they do and the contribution they make to our vital public services. Therefore, it is imperative that they are appropriately rewarded for the work they do.
“While we welcome proposals for additional flexibilities, and any agreed will be available for use in Scotland, I am concerned that the proposals do not go far enough to deal with the overall issue of the Annual Allowance and Lifetime Allowances. I fully welcome and support BMA Scotland’s campaign to address the current pension taxation issues.
“We will continue to work in partnership with BMA Scotland, other stakeholders and the Scottish Public Pensions Agency to ensure that we do everything within our power to address this vital issue.”
UK Health Secretary Matt Hancock, writing in The Telegraph earlier this week, said: “The way the system works at the moment, doctors and some nurses in certain circumstances have to pay to do overtime. They actually earn less, overall, if they work more.
“This is obviously unfair and completely counterproductive. It doesn’t work for anyone - not for those doctors and nurses, and not for the NHS which relies on their overtime and flexibility to keep the show on the road. We have promised action, and today we are delivering.”
Opposition politicians had already raised the issue, along with the BMA, which said it was “good to see the government finally sitting up and taking notice and proposing action”. The English NHS, the BMA has claimed, is facing a winter meltdown this year because of staff shortages.
The NHS is devolved, as are income tax marginal rates, but rules governing the taxation of pension contributions are reserved. Defined benefit pension schemes like the NHS’s are generally inflexible as members cannot lower their contributions to manage their annual allowance.
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