Budget 2014 Wishlist for Healthcare
Ahead of Wednesday’s budget, Moore and Smalley’s sector experts give their predictions and say what they would like the chancellor to do.
“I would also like to see something done about the Annual Allowance charge on GPs’ pension contributions,” says Nick Stevenson, from Moore and Smalley’s Healthcare Services team.
“The limit will is being 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.”