50% tax rate - unexpected consequence

[MollieO]

Ds not well so we ended up at the OOH service this afternoon. As it happens we saw our usual GP - knew that he did Saturdays OOH but didn't realise he also did alternate Sundays. He said he won't be doing them for much longer because of the 50% tax rate and associated loss of the basic rate personal allowance. Apparently 16 out of the 20 GPs who cover OOHs are also quitting. This is because doing OOH work puts them just into the 50% bracket but because of the tax effect sees them actually being paid nett very little for the work they do.

It means that we will lose an excellent local facility and see it replaced with locums (at least I assume that is what will happen at best, at worst the facility will be reduced). Unlike the current GPs the locums will have no connection with the existing GPs surgeries and I can only see that as a bad thing.

I'm not against the 50% rate (never likely to affect me) and had assumed it is only the 'very rich' who are affected. However the impact of its introduction will perhaps have a far wider effect than we like to think.

Oh and that was on less than a fifth of the average GPs salary btw.

Taking half of every extra pound you earn (or in fact, even more of every pound between £100k and £150k) is an obvious economic disincentive.

I don't earn anywhere near that amount but I am very glad that there are many who do.

All very well for people who don't earn that much to say "well, like it or lump it". The problem for the country is that it is very very easy for such people to lump it.

When Nigel Lawson cut the top rate of income tax from 60p to 40p, the total income tax revenue soared.

There are people who like paying tax, and would gladly pay more, but they are in the minority. Most people pay their tax grudgingly, think they pay too much for the level of public service provided, and would like to pay less.

cazwa people are generally paid a lot because they are very clever -have worked bloody hard from age 14 - deferred a lot of god times whilst their mates were having fun - are good at what they do and work long often unsociable hours

if i did some jobs that my mates do - i would want decent pay

shirking tax does not come into it

i could not do a job that kept me awake at night worrying about patients etc - let alone getting up on xmas morning to see to them at 5am - but some folk do

why is no one 'allowed' to do well these days

They don't get paid 150K for a 40-hour week so, yes, could drop some of the services provided for more quality time at home with their family, golf, whatever. You said tiredness kills. That would apply for your regular GP just as much as for the locums, wouldn't it?

It's all very well to critcise GP pay levels, but 40 years ago solictor and doctor pay was about the same. Over time doctors pay was gradually eroded - the new contracts which were written 5/6 years ago restored some of that loss. Personally I want the very best people in the medical profession in this country and don't object to a penny that they get paid.

When the GP contract was re-written, the governement went to GPs and said that for £6k a year per GP, they could opt out of OOH. At the time they told the goverenment that that wasn't enough money and that they wouldn't be able to provide a service for that much, but they didn't listen.

Gaelicsheep - GPs are not employed, they are self employed. It is already hard enough to recruit into general practice in a lot of inner city/deprived areas where use of the service is high, without making it any less attractive.

gaelicsheep - quite. Not suggesting that GPs are expected to work overtime for nothing but that their contracts should include evening and weekend shifts on a rota basis. Plenty of other jobs include clauses about evening and weekend work - but nobody complains about that. If the service requires these GP to work some evenings and weekends then IMO they should be. Those who could not manage that could work mon - fri on a lower wage, so the OOH component would be extra.

My dad's in this position. He's a GP in his mid 60s and really should be thinking of retiring. He won't because his health is relatively good and he's happy to work for a bit longer. But it really isn't worth his while to work so hard (lots of evenings and he used to do weekends) when he takes home so little of it. If he were forced to do the out of hours shifts, I suspect he would give up entirely. He's just not at an age where he really wants to be working 60+ hours a week, and I have to say I don't blame him.

There's no doubt in my mind that hiking tax is a disincentive and that ultimately the tax take will reduce. But it seems that the increase in tax was not introduced to make a practical difference, more to make a point.

That's fine, but if the net result is less tax take then what? Is it still work making the political point?

In my experience British Doctors are a load of self important scroungers in the main.

"Someone is ill"

"But i get taxed at 50pc, can't be arsed"

Nice. Go work in banking. My doctors has Spanish and German docs, i only see them, wont see a British one....they are dangerous for your health.

Litchick - Quite. Brown played such a clever trick giving (some) labour voters the impression that 'taxing the rich' is a realistic alternative to cutting public services.

Coolfonz It's going the other way. Every bright A'level student I've met lately wants to go into medicine (they are not interested in banking).

what i think this highlights is that GP are just ridiclously highly paid...

because of a deal done in order (ironically) to get them to take on saturday/evening surgeries.

our local surgery still doesn't open saturday...bet they still benefitted from the pay rise though.

OP - i think his highlights that GPs run their surgeries to suit themselves, not the needs of patients (who, after all, still get sick at weekends, or, if they work, may want non-urgent appointments outside woking hours)

the majority of salaried professions require people to do overtime for free where appropriate (if you are in management in some areas, this can mean working more than double your contracted hours free, gratis, and for nothing..).

i very much doubt a local solicitor ticking away from 9-5 during the week and staying late to get stuff done earns £100k (there simply isn't enough money involved in the kind of work they do). And yet the average GP clocks £130k.

Regardless of the marginal tax rate, it's really the absolute figures that matter on this.

If you ask someone on £20k if they'd like to do extra hours for another £20k p/a, you'd get a different answer than if you asked someone on £120k.

It is odd about the GP deal ... .

My bf is in the highest tax band. He doesn't get the choice about clocking off to bring his earnings down. And I'm not sure he would, anyway.

He would be seething about that GP.

Actually, the GP deal wasn't odd. It was just a piece of very poor negotiation by Labour.

Because, of course, he's working - so can only see the GP "out of hours".

an awful lot of MPs are GPs...

"i could not do a job that kept me awake at night worrying about patients etc - let alone getting up on xmas morning to see to them at 5am - but some folk do"

completely agree - i don't know what GPs some of you are seeing but the one's at my practice deserve the money they earn and then some!

They might only see patients during certain hours, but they do paperwork and followup that encroaches onto their weekends already never mind when they're on OOH rotation.

Because of my complicated mecial history I have received calls late at night and on weekends/bank holidays from my GPs .

it's hardly an unexpected consequence is it?!

It happened in the 1970s when the government put up the marginal tax rate to well over 50% and pretty much crippled the British economy.

Coolfonz your experience is clearly limited and unfortunate. Yes there are some bad doctors as there are bad everything, but the vast proportion work very hard and deserve every penny.

Spare a thought for people in that tax bracket who don't have the option of not working "out of hours".

Lots of people earn over £150k pa and travel abroad extensively meaning they're on planes at weekends, in meetings in the evenings, etc. I doubt that anyone earns that sort of money by doing a 9 to 5, Monday to Friday job.

EdgarAllenPoll

As I said on the Evan Harris thread, the reason that GPs get elected so easily is not hard to fathom.

They have massive local name recognition, and they are are actually trusted by local people.

Worth pointing out that at that level of income people are over the maximum level for employee National Insurance contributions - so instead of (like most of us) paying 11% employees NI, they only pay 1%.

So although they pay 10% more tax, they pay 10% less NI . . .

Admittedly, the drop in NI kicks in well below the £150,000 mark, can't recall exactly where.

To be blunt, I can't imagine that anyone earning £150K is going to be that bothered about extra money that they are earning for doing overtime - either they do it because of a sense of responsibility, or not.

I like my GP
I like the 50% band
But smallwhitecat I do agree with you that they are paid too much