"The consultation into the 50:50 proposal opened by the Department of Health today is at best a sticking plaster. The plan, which is meant to give senior clinicians more flexibility in how they save for a pension and better equip them to avoid the pension tax charges, illustrates government is unwilling to properly diagnose the root cause of this issue. The annual allowance taper, a complex piece of pension tax legislation, is resulting in clinicians facing punitive tax bills for working additional hours. It means that NHS services are being left short-staffed. The policy should be completely unwound, rather than implementing this workaround put forward by the health service.
"The government’s own Ministers have rightly highlighted that there cannot be special tax arrangement for schemes in particular public sector vocations. The chief secretary to the Treasury, Liz Truss, has already acknowledged in parliament that creating different rules in the tax system for certain sectors is not a practical option as it risks discrepancies and tax arbitrage.
"Since it also refuses to abolish the annual allowance taper, the only option for the government is to retro-fit this backdoor solution into the design of the NHS scheme in order to try and alleviate some pressure on doctors. A far simpler option would be to scrap the taper altogether, which is the root cause of the problem. This would also help to make sure that other public sector workers faced with the same problem are not also affected by the taper."