Responding to the 2025 Budget, presented by the Chancellor of the Exchequer today, Andy Pow, adviser to the Association of Independent Specialist Medical Accountants, said:
‘The good news for GPs is that no changes to the pension tax regime were announced in the Budget, which could have impacted GPs both individually and as employers. In addition the threatened new National Insurance rules for partners did not materialise.
‘However, there is little comfort to be found elsewhere in the Budget, particularly for the increasing number of GPs taking dividends from limited companies. They face a 2% dividend tax rate increase from April 2026, both at the ordinary and upper rates.
‘There is also a 2% increase on the tax GPs pay on their savings and any income they earn from rental properties, although Scottish tax rates on rental income are set locally.
‘The new electric vehicle excise duty from April 2028 will see costs going up for GPs owning electric and plug-in hybrid cars.
‘The tax threshold freeze until 2031 is particularly problematic for GPs who find themselves dragged above the £100,000 tax band. Many doctors are likely to face losing their tax free personal allowance and childcare allowance and may instead choose to work fewer sessions.
‘With practice funding under pressure, and costs set to rise with the minimum wage increases announced yesterday, there is little cheer for GP partners facing considerable uncertainty as the NHS 10 Year Plan plays out over the coming months. That being said, the Budget could have been a lot worse.’