Senior doctors in England will have their tax bills covered by the National Health Service this winter after a pension tax crisis threatened to exacerbate treatment delays.
Patients have faced delayed or cancelled operations partly because hospital consultants have refused to take on extra shifts over fears the extra income could trigger six-figure pension tax charges.
Under emergency plans expected to cost hundreds of millions of pounds, senior NHS staff delivering front-line care will be granted early access to their pension pots in order to help cover any extra charges in their April tax bill. Each pot will then be topped up by NHS England before they reach retirement.
Despite reservations the decision could violate purdah rules — which state that no major government policy changes can be made during an election period — NHS England is expected to press ahead with the plan as the health service comes under increasing strain over the winter period.
For months the health department has been keen to find a solution to the crisis, which has been focused on the application of the annual allowance “taper” for doctors who exceed their full-time contracts.
The changes, introduced in 2016, limit the tax relief high earners can claim on pension savings through a tapered annual allowance. As a result of the rate at which tax relief is withdrawn, some senior clinicians have faced marginal tax rates of more than 100 per cent and have refused to take on the extra shifts on which the NHS relies to cope with relentlessly rising demand, especially during the winter months.
Twitter has been alive with reports by doctors describing how they are spending what they have dubbed “pension days” when they would normally have been shouldering extra duties. The evident relish some have taken in enjoying a less pressured workload has raised concerns that, even if the tax issue is resolved, some may be reluctant to revert to their previous hours.
Ministers have come up against Treasury concerns that acting unilaterally to ease the concerns of senior medics would trigger demands from other professions where high earners have also been hit by large and unexpected tax bills.
The Conservative election manifesto is expected to include a pledge to work with health leaders and initiate a short review into finding a longer-term solution to the “taper problem” within the first 30 days of a new Tory government.
It comes after new data released last week showed the NHS had suffered one of its worst ever performances on record since targets were introduced, missing key targets for emergency care, routine operations and cancer treatment.
Experts warned that the figures from NHS England showed the health service was buckling under the strain of rising demand even before the onset of the coldest weather — which usually sparks increased demand — suggesting the service could face one of its worst winter crises on record.
The data showed the number of people waiting to start non-urgent treatment reached 4.4m at the end of September, a 7 per cent year-on-year increase. It also showed that 84.8 per cent of patients were waiting less than 18 weeks, against a target of 92 per cent. This compared with 86.7 per cent at the end of September 2018.
