Unwanted side effects

An unhealthy tax change hits British hospitals

Doctors are refusing to do extra shifts, for fear of being hit by complex new pension rules

关注公众号《备考CATTI》，免费分享有关资料，笔记等！

BRITAIN’S National Health Service often seems to be stumbling from crisis to crisis, but its latest problem is a self-inflicted wound. Waiting lists for operations in England have risen sharply, with one trust reporting a 50% jump in the past three months. The problem is not caused by a shortage of doctors but rather by the fact that existing staff are refusing to do extra shifts, because of the tax bills they would face. In some cases, the rules mean doctors would in effect lose money by working.

The problem stems from two contradictory policy impulses. On the one hand, the government wants people to save towards a pension, so it gives them tax incentives to do so. But it does not want the hit to its tax revenues to be too great, so it seeks to limit the size of the pensions break. High earners (like hospital consultants) pay a marginal tax rate of 40% or 45% on their income and have a particular incentive to avoid tax by making a pensions contribution. In the tax year 2010-11, such earners could contribute £255,000 ($320,000) into a pension without paying tax.

This was expensive, so David Cameron’s government drastically limited the annual amount people could contribute to a pension, free of tax—first to £50,000, and then to £40,000 from 2014-15 onwards. But the real complications came with a change to the rules in 2016-17, which introduced a “tapering” of the annual allowance.

Tapering is based on two key levels of income. The first is the “threshold income” rate, of £110,000. This is based on the worker’s salary. But once the threshold is passed, employees can fall foul of a second number, the “adjusted income” level, of £150,000. The “adjusted income” figure includes any increase in a worker’s pension rights, and not just their pay. Contributions made by the employer count towards this amount. The resulting “pension growth” figure is calculated on the basis of a complex formula, but is usually a multiple of many times any extra pay the employee has received.

The British Medical Association (BMA) gives a real-life example of a consultant who agreed to take on an extra management role in the face of staff shortages. This extra responsibility came with a reward of £10,000 a year. Before the increase, the doctor was earning £101,000. The pay increase took his salary above the threshold income level of £110,000. And the pay increase was then converted into a “pension growth” figure of £107,000, taking him well above the adjusted income level as well. The result was a one-off tax bill of £42,000, or more than four times the pay increase. Because of his extra work, the consultant was worse off.

The problem has taken a while to kick in because high earners were allowed a three-year period when they could carry forward tax allowances from previous years. That time is now up and so the full weight of the post-2016 rules applies.

【七月份】经济学人

Microsoft’s transformation required a change of culture

Pet-ownership is booming across the world

Cori Gauff announces herself at Wimbledon

Boris Johnson may reverse Britain’s embrace of sin taxes

How to predict the weather

BMW tries to turn a corner—and loses its boss

推荐阅读：

【历年张璐口译】2019总理记者会，张璐翻译的这些话真给力！

公众号后台回复：

"政府工作报告"|"资料"|"外交部金句"|"卢敏".......

更多英汉注释政府报告：

十九大完结

19大词组及句子整理（百度网盘）

2019政府工作报告完结@备考CATTI个人注释

2018政府工作报告完结@备考CATTI个人注释

2017政府工作报告完结@备考CATTI个人注释

【中英对照全文】2019政府工作报告

---

如果您感觉本文还不错或者对您有帮助，那请分享给您的朋友