Long term, sustainable solution needed on pensions tax, says RCPCH

Ministers and NHS leaders have signed off on an interim plan to address the pensions tax issue affecting doctors who take on extra hours.

Responding to media reports, Professor Russell Viner, President of RCPCH said:

Progress on pensions is vital and we look forward to seeing more information about the proposals. The pensions issue has worsened an already very tough situation on staffing and workforce, just as we get ready for winter. We know that doctors have been stepping back from extra duties and shifts, because going above and beyond – even when stepping in to plug gaps - may lead to huge tax bills.

This is having a knock on effect to patients and people who need our care. Paediatricians very often find themselves filling in rota gaps or working extra hours to support their clinical services. To now feel they risk a massive tax bill in doing this has made many feel worried and deeply uncomfortable.

We have surveyed our members on the complexity of the pension system and the impact of tax bills on front line care and will publish the results in the coming weeks.

We are urging the next government to reform the tax rules to bring clarity for doctors and all healthcare workers. This should be included in a package of urgent workforce measures to shore up a system that is stretched beyond its capacity.


The Government in England has announced the NHS will cover the cost of exceptional tax bills incurred by doctors due to changes in the pension scheme. It has been widely reported that extraordinary tax bills are discouraging doctors from taking up additional shifts and duties. This is unsustainable for an already stretched NHS. Details of the plan have not yet been released, but the announcement states that NHS staff will be granted early access to their pensions in order to help cover additional charges in their April tax bill. NHS England will then top up their pension pot before they reach retirement, to ensure that those issued with a tax bill are not left worse off. We will continue to monitor developments and update members as we get more information. 


Scottish Health Secretary Jean Freeman has brought forward measures to allow eligible NHS staff to have employer pension contributions paid to them as part of their basic pay. This temporary policy will only apply in the current financial year. The new option will mean staff who are likely to breach the annual allowance in the 2019-20 financial year, and face a tax charge, can withdraw from the NHS Pension Scheme and receive employer contributions as an enhancement to their basic pay. The scheme will run until 31st March 2020. Professional bodies including the British Medical Association and the Royal College of Physicians of Edinburgh welcomed the announcement as a step in the right direction and have called for UK-wide tax reforms before the 2020-21 financial year.

Wales and Northern Ireland

No announcements concerning Wales or Northern Ireland have been made, but the pension tax legislation affects all of the UK. Senior clinicians in all of the four nations are therefore at risk of being issued with tax bills, and those in Wales and Northern Ireland do not have policies to mitigate this.