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At the heart of general practice since 1960

NI rate hike for self-employed set to 'wipe out' increases in GP funding

GP partners will be forced to pay higher rates of National Insurance from next year onwards, following the announcement of today's Spring Budget.

In his budget speech, chancellor Philip Hammond announced that the NIC paid by GP partners would increase by 2% in the course of the next two years.

Medical accountants told Pulse this would completely wipe out any uplifts to GP contractual funding, if the Government continued to apply 1% year-on-year public sector pay rises.

The Government's budget statement said: 'The main rate of Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and to 11% in April 2019 to reduce the gap in rates paid by the self-employed and employees, and to reflect the introduction of the new State Pension to which the self-employed have the same access.'

Mr Hammond said the plans for changing NIC rates would raise 'a net £145m a year for our public services by 2021/22, an average of around 60p a week per self-employed person in this country'.

He added: 'This change reduces the unfairness in the NICs system and reflects more accurately the current differences in benefits available from the state.'

Medical accountant ‎James Gransby, head of healthcare at MHA MacIntyre Hudson, and and an executive board member of the Association of independent specialist medical accountants (AISMA), said: 'For GP partners already under financial pressure from high rates of tax and suffering from attacks on their pensions in recent years, the news that their main rate of class 4 national insurance contributions will rise by 2% over the next two years from 9% to 11% will be a bitter pill to swallow'.

He said this was 'not least because this all but wipes out the promised income increases recently announced in the 2017/18 GP contract review'.

Medical accountant Luke Bennett, from Francis Clark LLP and an AISMA committee member, added: 'If public sector pay rises continue at 1% then this will be completely cancelled out by NI rises.'

Readers' comments (10)

  • The Lord Sith giveth, and taketh away....

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  • Disappearing Doc


    Jeremy Hunt's lost hamster | GP Partner/Principal08 Mar 2017 4:00pm
    Please consider changing your posting name..the mental image it forces makes me feel uncomfortable ;)

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  • A few more pushed into retirement..

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  • X.Ray

    Let me know when the penance stops please Jeremy

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  • Counting down to the day of my retirement. This is just one more reason to go.

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  • The promise is nearly gone. It's nearly time to shrink the business and run to minimum contract guarantees a la Virgin/Care UK.

    I will increase my referral spends by 50% to save 10%.

    What a shame.

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  • Clearly Jeremy knew this was coming down the pipe. He must have been stifling his laughter when the GP negotiators thought they had winkled a pay rise out of the DOH.
    And if the Tories are now tearing up manifesto promises, can we finally bin the whole 7 day fiasco please?

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  • They want a private health system with employees they can control . This is another step along the yellow brick road .

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  • We know whatever they give us they take away the next week. i suspect the only way for us to make them realize we actually save them money is by starting to overspend on everything we do like prescribing and referrals maybe then they will have to take notice. As i have said before it seems that the only people who ever get benefit financially in the NHS are those that under perform not the ones who actually over perform or make savings as these always seem to go and bail out the under performers

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  • the job of a GP is becoming harder every day

    more for less is madness and simply will not work

    If it was near christmas we could us the Scrooge analogy but anyway it's more like the mad hatters tea party
    we all need to plan our personal exit strategies
    i've planned mine for 31/3/17
    I am beginning to think of this as ESCAPE !!
    Sad really but so are all the years training, years of extra unpaid work, responsibility and doctor bashing by certain newspapers and government who have no idea of the true value or even the true monitory value of doctor and nurses
    With a bound I will be free to work if I wish when I wish to be available
    I wish I had had the clarity of thought to do this 4.5 years ago

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