GP Warns Tax Increase Threatens Practice Viability

A physician has stated that a proposed increase in the National Insurance (NI) rate for employers could push GP practices “over the edge.” While the government has indicated that the NHS and the broader public sector would be protected from this rise, this protection does not extend to GP practices, many of which operate as small businesses. Dr. Andrew Purbrick, who represents 300 GP practices across the south of England, indicated that numerous practices would be compelled to reduce staff or close. He remarked, “We would describe general practice as being on the precipice and, for a significant number of practices, this could push them over the edge.” According to changes announced in the Budget, employers will be required to pay NI at 15% on salaries exceeding £5,000 from next April, a change from the current rate of 13.8% on salaries above £9,100. GP practices receive their funding through contractual agreements with the NHS. Dr. Purbrick serves as joint chief executive of the Wessex Local Medical Committees (WLMC), an organization covering Hampshire, the Isle of Wight, Dorset, Wiltshire, and Somerset. He asserted that the current core funding, amounting to £112.50 per patient annually, is insufficient to cover costs. The GP described the tax increases as a “hammer blow to already fragile practice finances,” adding, “It feels like a kick in the teeth when you are already really down.” The Institute of General Practice Management, which represents GP practice managers, has estimated that this increase will raise the average-sized surgery’s annual tax bill by approximately £20,000. Additionally, planned increases to the minimum wage are projected to add another £10,000 on average to wage costs. Dr. Purbrick, a GP in Poole for 24 years, explained that practices function as independent businesses and cannot sustain operating at a deficit. He stated, “We can’t pass on costs to customers like other private businesses.” He further warned that “Practices are going to have to make difficult decisions around recruitment and replacing staff, which will have an impact on patient access to see a GP.” The WLMC is advocating for the government to exempt GP practices from these tax increases and to enhance funding for primary care. A government spokesperson responded by saying that “tough decisions to fix the foundations” had been made, enabling the announcement of a £22bn boost for the NHS and social care in October’s Budget. They noted that the rise would not take effect until April and that the government plans to release further details on funding allocation for the upcoming year in due course. The spokesperson also added: “We will also hire an extra 1,000 GPs into the NHS by the end of this year, having already announced a contract uplift for GPs and practice staff, and we will ensure practices have the resources they need to offer patients the highest quality care.”