Wylie & Bisset says taxation policy leaves GPs facing moral dilemma
Chartered Accountants Wylie & Bisset say that current government taxation policy leaves GPs and hospital consultants confronting a moral dilemma: whether to assist Out Of Hours (OOH) departments and waiting list initiatives or to avoid increased tax charges.
This week the British Medical Association (BMA) warned prime minister Boris Johnson that punitive taxes on pension contributions are forcing doctors to cut back their working hours and represent the greatest threat to the NHS workforce and patient services.
Laura Fagan, Director and Head of Healthcare at Wylie & Bisset, noted that while the BMA has welcomed the Prime Minister’s campaign commitment to ‘fix’ the lifetime allowance, the lifetime allowance is not the only problem.
“Our GP clients are more concerned about the tapering rules and annual allowance tax charge,” she said.
“On review of the 2017/18 position, many of our clients who suffered a tax charge on their pension savings, did so because of tapering. They feel they are being penalised by working hard, both in practice and in OOH posts.
“Many of those affected have now cancelled their OOH commitments or are considering doing so this year due to the ‘penalty’ of the tapering rules and the effective rate of tax (we have seen an instance where take home pay on OOH income was less than 20%).
“Our GP clients, and indeed hospital consultants, are telling us they have a moral dilemma: they want to assist OOH departments and waiting list initiatives, for example, but at the same time don’t want increased tax charges as a result.”
Fagan said that she is aware of a number of GP partners seeking to reduce practice commitments and hospital consultants reducing hours in a bid to avoid tapering rules and a Pension Savings Tax Charge.
“GPs and consultants alike would most certainly welcome a review of, and change to, the current regime, otherwise the recruitment crisis will only deepen,” she added.
“The changes to the pension rules were introduced a few years ago and have hit GPs and hospital consultants hard. If nothing is done, the workforce will continue to reduce….and where will that leave us?”
Fagan advises GP practices and hospital consultants seek advice at the earliest opportunity.
For further information please contact Laura Fagan on 0141 566 7000
Issued on behalf of Wylie & Bisset by Liquorice Media tel 01877 382961 www.liquorice-media.com
Date: 2 August 2019