Think tank report suggests new NICs charge for GP partnerships

A policy think tank has proposed a national insurance contributions (NICs) increase which would affect 96% of GP practice partnerships and raise £250m.

The increase, proposed in a report from the Centre for the Analysis of Taxation (CenTax), would raise an estimated £1.9bn from partnerships including GP practices, solicitors and accountants.

It advocates ‘Partnership NICs’ as an equivalent to employer NICs already paid by businesses that operate as companies, which would raise an estimated £1.9bn in 2026/27. 

The Telegraph reports that the plans have been ‘presented’ to the Treasury for consideration as a way to raise revenue in November’s Autumn budget.

The CenTax report says: ‘The lack of an Employer NICs equivalent on partnership profits is a particularly conspicuous anomaly.  

‘The resulting wedge in effective tax rates is an accident of history rather than a conscious policy choice to favour unincorporated businesses over those that operate as a company.’ 

GP practices would be affected more than any other type of partnership, with 96% of partnerships liable to pay extra in ‘Partnership NICs’, according to the report.

This is because most GP partnerships have total profits exceeding the Partnership Allowance and profit-share per partner exceeding the £5000 Partners Exempt Amount, it says.

But it also suggested GPs could be reimbursed with some of the revenue raised via an increase to their funding settlement. 

‘If the Government wished to avoid reducing the net pay of GPs, then the approximately 10% of revenue that comes from this group could be “recycled” back to GPs as an adjustment to their funding settlement.

‘In that case, the net revenue from the reform would be reduced to approximately £1.7bn. We take no position on this issue, or more generally on the use of any revenue raised’, it said. 

It said 98% of the revenue raised would come from individuals in the top decile by total income, and 58% from the top 0.1% alone. 

But Dr Adam Janjua, chief executive officer at Lancashire and Cumbria LMC, warned of the impact on GP partners ‘already on their knees’ if the Government were to consider the proposal.

Dr Janjua said: ‘It will devastate GP partners, accelerate practice closures and drive doctors away from partnership – the backbone of NHS general practice.’

The global sum funding boost agreed as part of the 2025/26 GP contract was intended to cover extra NIC costs, according to GP leaders.

In June, a Pulse survey found over 60% of GPs were unsatisfied with the Government’s handling of general practice with respondents pointing to insufficient funding and NIC costs.

A Treasury spokesperson told Pulse it does not comment on speculation around future changes to tax policy.

The spokesperson said: ‘As set out in the Plan for Change, the best way to strengthen public finances is by growing the economy – which is our focus. Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn.

‘We are committed to keeping taxes for working people as low as possible, which is why at last Autumn’s Budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of Income Tax, employee National Insurance, or VAT.’