New relaxing of pension tax still means big bills

By Edie Bourne

Some doctors may mistakenly believe they will not face large tax bills because of the recent easing of the pensions savings tax rules in April. 

In the Budget, the Chancellor Rishi Sunak raised the threshold at which tax-free allowances begin to reduce and the strict ‘annual allowance’ begins to be tapered. 

Under the new rules, anyone with a ‘threshold’ income of £200,000 or more, plus an ‘adjusted’ income of £240,000 or more, is subject to a reduced annual allowance. 

The threshold income includes earnings from all sources, so this might include NHS salary, private practice or academic work, investment returns and buy-to-let incomes. 

The adjusted income also adds in pensions growth for the year. This growth can be substantial for many private doctors who have NHS work.