An organisation representing doctors has warned that health services in Northern Ireland could be put under extra pressure due to pension tax bills causing doctors to consider reducing hours and retiring early.
The British Medical Association, Northern Ireland described the tax changes as “punitive” and “unexpected”.
A BMA Northern Ireland spokesperson said: “The bills are due to the way annual and lifetime allowances, and the annual allowance taper, are acting in a complex and punishing combination that pushes doctors into a tax trap, which in many cases leaves them owing tens of thousands of pounds or in a situation where working beyond their contracted hours — for example by taking on waiting list initiative work – leaves them worse off financially as they are taxed more than they were paid for the work.”
The BMA spokesperson said that in a survey of members, 19% of consultants had already cut their working hours in order to address the issue; 45% of consultants intend to reduce their working hours in the next few years because of the issue; 40% of those intending to reduce their hours will do so by reducing their workload by one day per week; and 42% are intending to retire earlier than they had previously planned.
Anne Carson, Chair of BMA Northern Ireland’s consultant committee (NICC) said: “The results of this survey makes it clear that because of the way tax rules have changed health services in Northern Ireland will be put under more 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.
“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.”
The NICC chair continued: “The inherent unfairness and unpredictability of the way this tax is calculated is unjustifiable, particularly given consultants here are already 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.
“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.”
She added: “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.”