James O'Brien Left Speechless By NHS Tax Problem Which Has Sent Waiting Times Soaring
9 July 2019, 12:47
James O'Brien was left lost for words as this financial advisor outlined why the government's changes to NHS pensions have left the service struggling to cover shifts.
Waiting lists for operations are rocketing because senior doctors are turning down shifts because a change in how their pensions are taxed means they lose money by working overtime.
One senior anaesthetist had worked 27 Saturdays in a year to help reduce the backlog, but had now told his employers he would no longer work additional shifts.
Rachel is a financial advisor who specialises in the medical sector who is dealing with the aftermath of these pension changes and she explained why things have got so bad for the NHS.
Speaking on James's show, she said: "This extra form of taxation came in in 2016/17. It's started to filter into the system and everyone is getting massive tax bills. But those tax bills are so disproportionate to their earnings.
"Let's draw an example: you've sold a rental property and you've made £250k. You will put some of that money aside for the tax man and you'd pay it on 31st January the following year.
"These doctors are waking up and finding they have a tax bill of up to £250k and they haven't even done anything. They haven't sold anything, property or shares.
"The highest I've seen with my clients is £500k over two tax years. It's not uncommon. The average is £80k."
James admitted he was reeling by those numbers - and then things got even worse as Rachel explained how doctors doing extra shifts may actually find themselves out of pocket.
She added: "I worked on a case recently where somebody had income of £107k and did some cover to get £5k which was not pensionable. On that £5k, it attracted a £13.5k tax liability.
"That's because it took them from £107k to over the £110k threshold and then you see this effect."
Rachel's call was so remarkable, she earned something very rare on James O'Brien's show - a Ray Liotta.
Watch the full, remarkable call at the top of the page.