Northern Ireland doctors considering cutting hours and early retirement due to pension tax
Doctors in Northern Ireland have warned that health services could be put under additional pressure due to unexpected pension tax bills.
The British Medical Association has said that doctors are considering cutting their working hours and even taking early retirement over the issue.
Rules introduced in 2016 penalise consultants if they breach their pension saving allowance.
The changes mean that consultants and other NHS staff earning more than £110,000 a year risk large unexpected tax bills after their income increases.
The BMA said that doctors were finding themselves in the situation where they were working beyond their contracted hours and being left worse off financially as they are taxed more than they were paid for the work.
BMA surveyed 214 consultants and found that 19% had already cut their working hours in order to address the issue, while 45% intended to reduce their working hours in the next few years because of the issue.
The survey found that 40% of those intending to reduce their hours will do so by reducing their workload by one day a week and 42% are intending to retire earlier than they had previously planned.
Chair of BMA Northern Ireland’s consultant committee Anne Carson said it was clear the tax changes would put the health service under strain.
“This is not avoiding paying taxes – consultants are already taxed on their pay. This is about the punitive tax there is for taking on additional work, for example covering for colleagues, covering maternity leave, taking on management work or waiting list initiatives," she said.
“Nor is this about consultants avoiding or not wanting to address waiting list issues – we are committed to addressing the issues around waiting lists and transformation in Northern Ireland but due to the way the tax system is set up it essentially means that we would be doing that additional work for free.
“The consultant workforce is already stretched to the limit and this additional pressure and worry about the possibility of facing a huge unexpected tax bill just adds to this stress. There is a time lag in the provision of pension information here so while only a few doctors here have received a bill, if we follow the pattern of what has happened in England and Scotland the bills will land soon and the average bill could be £18,500
Mrs Carson said the tax was "unjustifiable", particularly as consultants in Northern Ireland are the lowest paid in the UK.
"Asking people to continue working when they could end up worse off than when they started is ridiculous and leaves doctors with no option but to cut their working hours. It is hard to overstate the seriousness of this situation and its implications not just for consultants, but for hospital services and our patients who rely on them," she said.
“This loss of capacity in the workforce will inevitably have serious implications for the care hospitals are able to provide. In areas where staff shortages are already making services vulnerable, we have to accept there is a very real question mark about how they will be delivered in future. The staff simply won’t be in place, or able to work the hours needed.
“We will continue to raise this with local politicians as we seek a solution. We have met with the Department of Health to discuss this issue with them and, while pensions and taxation are reserved to Westminster, we would urge the Department to continue to work with us to address this and find a long-term solution.”
The Department of Health has been contacted for a response to this story.
Belfast Telegraph Digital