Following Labour's "landslide victory", the healthcare trade union says the change offers a “chance to turn around a health sector in crisis”, and lists five demands on the new government, in their BMA Manifesto;
- Value the vital role doctors play across all health services and restore their pay.
- Protect doctors from any further erosion of their professional role and employment rights.
- Train and provide jobs for the next generation of doctors needed to meet demand.
- Fund the services needed for the future of the health service.
- Safeguard the public’s health and wellbeing, prioritising preventative care.”
In the document, the trade union raises concerns about the “punitive impact” of the Lifetime Allowance (LA) and the Annual Allowance (AA).
In March 2023, Conservative Chancellor Jeremy Hunt announced that the AA threshold would be raised to £60,000 and the minimum tapered AA would increase to £10,000 from 6 April 2023.
This was introduced following a backlash from professionals, especially those in senior positions who, unable to control their pension growth, would be “punished” with higher taxation on earnings over the threshold, often accrued from increased hours at work. This induced many medics to work fewer hours, during a time when patient waiting lists were only growing.
The scheme was first introduced under a Conservative Government back in 2004 and set the allowance limit at £215,000, then dropping to £40,000 in 2014 before being raised once again to the rates in place today.
Holly Gibson, Partner at Price Bailey, and health sector specialist comments:
"Doctors want to be able to do the job they trained so many years for, without being held back by challenging tax charges. Labour dropped its plans to reintroduce the Lifetime Allowance, however, there is no long-term reassurance that this won’t happen in the future. Labour also need to address other tax issues such as Annual Allowance.
"Doctors need absolute certainty over the tax effects on their pension so they can remain in the NHS but also take on additional work without having a tax consequence for doing so.
"Clinicians will need to be seeking advice to ensure they are fully aware of what their pension looks like now, and what implications any additional work or other changes will have. It is also worth exploring if there is any unused Annual Allowance from the previous three tax years that can be utilised.
"By doing some planning and by better understanding their personal situation, this will allow clinicians to be furnished with the information ahead of any changes Labour might make, including the reinstatement of the Lifetime Allowance, so if a change is needed they can act as quickly as possible to protect their tax position.
"Labour has put the NHS at the forefront of its promises, and in order to fulfil those promises they will need to ensure that doctors are properly valued for the work that they do. This is especially important if they want to clear the backlog and reduce wait times.
"This includes looking after the most senior doctors and arriving at a conclusion with the junior doctors dispute."
Financial support for doctors is available at Price Bailey, visit their website for more information: Specialist Healthcare Accountants (pricebailey.co.uk)
