Warning GP practices could close over tax increase

Some GPs are warning a higher tax burden could be the "final nail in the coffin" for practices.

Chancellor Rachel Reeves announced increases in National Insurance (NI) and the minimum wage from April, in her Budget last year.

Dr Peter Holden a Derby-based locum GP and East Midlands representative for doctors union the British Medical Association said some practices had already handed back contracts to the Department of Health and Social Care (DHSC) over the hikes.

The DHSC said it was working with GPs to "reform primary care, cut red tape and bring back the family doctor".

The National Living Wage will rise by 6.7%, from £11.44 to £12.21 from April, while the national insurance rate for employers will increase from 13.8% to 15% on a worker's earnings above £175 from April.

And while the NHS is exempt from tax rises, this does not cover general practice.

Dr Holden said: "General practices are the unusual part of the health service.

"[They] are individual contractors to the health service - albeit their services are 99% NHS - and you are given a lump sum of money for which you must deliver services and pay yourself."

But both of these things will become challenging when the increases come into force, he said.

He added 80% of "every penny" of practices' incomes went to expenses, with "no deficit budgeting".

"We have to make the books balance," he told the BBC.

Dr Holden said a large practice in the East Midlands - which he did not name - handed back its contract last year while others were "already falling over".

"The national insurance hike and national living wage hike are the final nails in the coffin to practices' liquidity and therefore ability to function," he said.

A DHSC spokesperson said: "Taking the necessary choices to fix the foundations of the economy at the Budget meant we could deliver an extra £26bn for health and social care.

"We've already hit our target of delivering an extra two million appointments, operations and scans six months early and announced an £889m boost for GPs to fix the front door of the NHS.

"Through our Plan for Change we are working with GPs to reform primary care, cut red tape and bring back the family doctor, and last week agreed a new contract worth £13.2m."

Follow BBC Derby on Facebook, on X, or on Instagram. Send your story ideas to [email protected] or via WhatsApp on 0808 100 2210.