Autumn Statement 2013: Remove the disincentives for GPs
As part of our preview of Autumn Statement 2013, Nick Stevenson, partner at Moore and Smalley offers his thoughts on what government can do to help GPs.
With the continuing workload pressures and squeeze on margins for GPs practices, I think this Autumn Statement could be one that healthcare professionals pay particularly close attention to.
What I would really like to see is the removal or raising of the limit at which the reduction in the personal allowance kicks in from its current £100,000 point.
I would also like to see something done about the Annual Allowance charge on GPs’ pension contributions. The limit will be reduced from £50,000 to £40,000 from April 2014, which will leave even more GPs facing an unexpected tax charge. This is because of the lack of control they have over the way their pension is calculated using HMRC’s multiple of the growth in the pension throughout the year.
The Annual Allowance leaves GPs with few options – either consider early retirement, opt out of the NHS pension scheme, or reduce their pensionable pay or suffer the tax charge. It would seem fairer for them to have an option to stop the deemed contribution at the limits set if they wished and thus receive a lower pension but not suffer the tax hit, just as members of private pension schemes can now do.
This is a major disincentive to GPs who want to earn more and perform better. If it isn’t removed, we could be heading for a shortage of numbers in the profession because of the number of GPs who will consider early retirement.
One measure that has been talked about that could impact GPs is the possible removal of the annual exempt amount for Capital Gains Tax. Currently £10,900 of any gain is totally exempt from tax.
This would have a significant impact on GPs coming up to retirement who may be selling their share on a property as they could end up paying more tax.