BMA welcomes deferral of pensions penalty tax


  • Dawn O'Shea
  • UK Professional News
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The BMA has welcomed the decision by the NHS to let doctors defer the cost of the annual pension tax penalty implemented when contributions were hit by the ‘tapered annual allowance’.

The change was one of a number of moves called for by BMA council chair Dr Chaand Nagpaul in a letter to the chancellor Philip Hammond in August.

Under the change, the NHS BSA, which manages the service’s pension scheme, can now pay a tax penalty imposed on doctors and other public sector workers in exchange for a reduction to their benefits at retirement.

Previously, the penalty accrued as a result of a ‘taper’ on the annual pension allowance which deterred senior staff from increasing pay through promotion, taking on extra work or leading innovation, the BMA says. Concerns about the penalty have been echoed by other unions representing firefighters, dentists, nurses and civil servants, among others.

Dr Nagpaul welcomed the Government’s offer to cover the tax charge change and pledged to continue to press for wider improvements to pensions.

In his letter to the chancellor, Dr Nagpaul had pointed out that the charge penalised senior doctors financially and undermined efforts to recruit and fill posts.

“GPs are being actively encouraged by accountants to reconsider their careers as the rules hit their pensions when they rise through the ranks,” his letter said. “This will naturally impact on Government’s stated aim to attract 5,000 new GPs in England by 2020.”