Matt Hancock may claim that the flawed “taper tax” on pensions affecting senior NHS consultants has been “scrapped immediately” – but this is flatly contradicted by the statements of NHS England and well-informed reporters.
The tax remains firmly in place, but NHS bosses and the government have bodged together a temporary fix. According to NHS England boss Simon Stevens “a substantive answer from Government to the tapered annual allowance issue now seems unlikely to take effect before the new tax year, from April 2020.”
The Health Service Journal sums up: “A temporary ‘solution’ to the pensions tax impact on the health service has been confirmed by NHS England and signed off by government. … This stop-gap solution comes amid huge concern about senior doctors turning down additional shifts, because of the threat of large tax bills on their pensions.”
However the HSJ points out that it’s still not clear where the funding will come from to refund the tax payments that would initially be taken from consultants’ individual pension pots, and refunded on retirement.
The Guardian notes that it is being presented as an “operational decision” by NHS England, to avoid criticism that it breaches “purdah” restrictions on new policy, “but was signed off – and some believe instigated – by the Treasury, Cabinet Office and the Department of Health and Social Care.”
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