The outcome of the government’s review on the tapered annual allowance is expected to be published in the upcoming Budget and reforms could be in place from the start of the next tax year, according to the British Medical Association.
In its manifesto, published on November 24, the Conservative government promised to fix the tapered allowance dilemma that is affecting doctors’ pensions.
It said it will do this by holding an urgent review to solve the “taper problem” within the first 30 days of winning the election and would work with the BMA and Academy of Medical Royal Colleges to carry out this work.
But it stopped short of promising to scrap the taper altogether, or to look at the issue more widely outside NHS pensions.
The BMA, which has campaigned for a fix to the NHS pension crisis, wrote to the prime minister and the chancellor immediately after the election to ensure that the review was being carried out as promised in the manifesto.
According to Vishal Sharma, chair of the BMA pensions committee, the union has received confirmation from the chancellor that the review, led by the economic secretary, is currently underway, with the BMA expected to meet with government shortly.
Mr Sharma said: “The outcome of this review will be announced in the upcoming Budget on 11 March and the BMA are clear that the necessary reforms need to be in place for the start of the next tax year.”
Despite this, the BMA argued decisive action was needed instead of a review and is calling for the tapered annual allowance to be scrapped.
The tapered annual allowance gradually reduces the allowance for those on high incomes, meaning they are more likely to suffer an annual tax charge on contributions and a lifetime allowance tax charge on their benefits.
The taper means that for every £2 of adjusted income above £150,000 a year, £1 of annual allowance will be lost.
Due to this rule, many doctors have been forced to cut their hours, leave the pension scheme or retire early to avoid being caught out by significant tax bills.
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