NEWS: GPs Urge Government to Block Tax Hike

As reported by BBC News, GPs warn that rising employer taxes could strain patient services, urging the government to shield them like other NHS sectors

GPs are calling on the government to protect them from tax rises for employers announced at the Budget, warning it could hit services for patients. The NHS and the rest of the public sector are due to be shielded from a hike in National Insurance (NI) contributions from April next year.

But GP practices, which deliver NHS services but are mostly run as small businesses, are currently due to be hit by the rise.

The government has suggested that the extra cost of higher national insurance contributions paid by GP practices will be taken into consideration when GP contracts are renegotiated later this year.

From next April, employers will have to pay NI at 15% on salaries above £5,000, instead of 13.8% on salaries above £9,100 currently. The Institute of General Practice Management, which represents GP practice managers, has estimated that the rise will put up the tax bill of the average surgery by around £20,000 a year. The row over the NI rise has highlighted the complicated nature of how publicly-funded healthcare is delivered.

NHS hospitals, like other parts of the public sector, will be effectively protected from the rise through scheduled back-payments from the Treasury. But GP surgeries, which operate mostly as business partnerships and deliver NHS care under government contracts, are not in the same position.

Downing Street said that an extra £600m in grants for local councils, which subsidise social care, would help “address pressures in the sector”. It added that funding for GPs next year would be determined through the annual NHS contract, which will be negotiated later this year.

Asked about the issue, Chancellor Rachel Reeves said that the “NHS needs to live within” its new financial framework.

More than £22bn of extra funding was announced for the NHS in this week’s budget, but it is not clear how much of that may go towards compensating for higher national insurance contributions. A Department for Health spokesperson said the funding boost was “for the NHS to get it back on its feet” and was announced alongside an “additional £100m to fund around 200 upgrades to GP surgeries across England”.