NHS Employers has published guidance for employers to support staff affected by the pension taxation issues.
Annual allowance rules are a particular problem for NHS staff, especially the tapered annual allowance, which restricts the annual allowance of those earning over £150,000.
The paper - from the organisation that provides guidance to NHS workforce leaders - outlined optional measures to help reduce the impact of pension taxation in the NHS.
The current limits have landed staff with huge tax bills and resulted in thousands retiring early, while many doctors and consultants are turning down work to avoid the charges.
The guide - published 2 September - set out the importance of independent financial advice, noting the impact of pension taxation in the NHS shows "there is a clear lack of knowledge and understanding" about the issues.
The guidance body stated employers can support staff by signposting to general information and resources to improve awareness and understanding.
The paper also notes that pensionable pay should be managed and states employees should be made aware that non-pensionable payments may still have an impact on their pension tax position.
If a workforce is paying employer contributions as additional salary, the guide reveals key considerations should include assessing the impact of the tapered annual allowance, and understanding the requirement of legal justification.
Ahead of the introduction of new pension flexibilities, which were proposed in a government consultation in July, guidance is also provided on potential arrangements for employees who decide to opt out of the scheme for part of the scheme year. It notes they must take financial advice if choosing to do so, while ensuring they have protected any family benefits.
Quilter pensions expert Ian Browne said: "This paper shows just how complicated it can get for someone who likely finds themselves unexpectedly stuck in a tax trap and unsure which way to turn.
"Some of the measures being adopted by doctors could later be deemed by the taxman as an avoidance scheme."
The tapered annual allowance - introduced by former chancellor George Osborne in the 2014 budget - is not only causing problems for staff in the NHS, but also in other public sectors including the judiciary and the armed forces.
Browne added: "NHS staff are not the only ones impacted by the tapered annual allowance and as such, the government needs to have a more permanent solution proposed in order to prevent the wide spread staffing issues becoming systemic across the whole of the public sector."
This comes after news that prime minister Boris Johnson's proposed income tax reforms would create pension tax relief ‘losers' as those earning between £50,000 and £80,000 would lose their higher-rate pension tax relief, leaving them receiving basic rate relief instead.
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