GPs, care homes and hospices voice concern over Budget tax rises

GPs, care homes and hospices have voiced concerns about the impact of the rise in employer National Insurance contributions announced in the Budget.

The NHS and rest of the public sector are exempt from the tax rise – but that does not cover private care homes or hospices which provide NHS services.

There is also confusion over the impact on GPs, many of which are run as small businesses.

The Department for Health and Social Care said further details for GPs will be confirmed in due course – but a Treasury minister told Question Time they will have to pay the tax hike.

Dr David Wrigley, a GP and deputy chair at the British Medical Association said the impact of the tax rise would be “monumental”.

He said on X that many were “already on a financial tight rope” and called for a “rapid announcement of full reimbursement”.

Mike Padgham, chair of the Independent Care Group, which represents social care providers, said the sector had been “left out in the cold”.

“We now employ collectively, more than the NHS – 1.7 million people. So those extra charges are going to hit charities and private sector providers alike when we’ve been squeezed by local authorities who are themselves short of cash.

“So if we pay more, we’ll have to charge more.”

Hospices UK said those providing NHS services should be treated the same as NHS bodies.

“Paying brilliant, compassionate hospice staff a fair salary makes up the biggest proportion of running costs, and so it’s disappointing the chancellor didn’t exempt charities, or providers of NHS services which aren’t formally part of the NHS, from yesterday’s National Insurance rise,” it said.

On Thursday Health Secretary Wes Streeting acknowledged there were a number of healthcare providers that will be affected by the NI rise for employers.

Asked whether social care providers would be protected, he told the BBC’s World at One programme: “I’m working through that now and I’ll have more to say on that in the coming weeks in terms of what we can do more quickly to deliver the shift I’ve wanted to see for some time, in the focus of NHS investment spending out of hospitals into primary community.”

He pointed to the extra £600m allocated to social care in the Budget.

Care groups have said this would not be enough and would be “wiped off instantly” by increased staffing costs.

For GPs, the Chief Secretary to the Treasury Darren Jones told Question Time on Thursday that GPs will have to pay employer NI contributions.

“GP surgeries are privately-owned partnerships, they’re not part of the public sector,” he said. “They will therefore have to pay them.”

But he said “how much they pay will depend on the size”, because the government had designed the new system “so that it protects the smallest businesses”.

“The OBR’s confirmed that over 50% of businesses will either not pay any more than they’re already paying or they’ll pay less or nothing at all because we’ve increased the threshold, the allowance, from £5,000 to £10,500 a year,” he said.

He added: “For the broader public sector… we’re going to be working that through the system understanding the implications for different public services.”

The Department for Health said it will work closely with the Treasury to ensure appropriate compensation for the public sector.

Chancellor Rachel Reeves has argued that the hike in National Insurance for employers was “difficult” but necessary to fund public services, including the NHS

Of the £40bn in tax rises she set out in her Budget, £25bn will come from the National Insurance increase.

From next spring, the rate that employers pay in contributions will rise from 13.8% to 15% on a workers’ earnings above £175.

A health department spokesperson said: “The chancellor has announced a £22.6bn funding boost for the NHS to get it back on its feet, alongside an additional £100m to fund around 200 upgrades to GP surgeries across England.

“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.”