Doctors and GPs in Scotland are likely to have to wait for some time before they see any positive changes to their taxation as a result of a commitment by the UK government to review how doctor’s pensions are taxed, a leading accountant specialising in the medical sector has warned.
Neil Morrison, Head of Medical with Campbell Dallas said:
“It is good news that Government ministers are proposing to change pension rules so that doctors can work additional shifts and treat more patients without suffering financially. A new consultation will be undertaken by the Department of Health and Social Care on the new proposals which will give senior doctors flexibility over the amount their personal and employer pension contributions.
“It should allow senior clinicians to do additional work without breaching their annual allowance and incur higher taxes. The Treasury will also review the highly unpopular tapered annual allowance, which has also led to much higher taxes for doctors. However, this whole process is going to take a considerable amount of time to finalise and for new pension rules to be adopted. As such, there are no quick fixes for Scottish doctors,” said Neil Morrison.
He added: “Doctors and GPs in Scotland will have to continue managing their income, pension contributions, finances and tax within the existing tax framework. We have many clients working in the medical sector that have suffered significantly higher tax bills in the last couple of years, and it is likely that these challenges will remain for the time being. It is essential that doctors ensure they arrange their income and pension in the most tax efficient manner.
“The situation is also slightly different in Scotland, and it will be up to the Scottish Government to decide how best to adopt the proposed revisions to pension rules. Unfortunately, this will also add further time to the process, however, we should welcome the fact that the current unpopular pension regime is being overhauled.”
01738 441 888
The information in this article should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.