Rachel Reeves’ GP tax ‘double whammy’ risks crippling NHS, warns lawye | Politics | News
Chancellor Rachel Reeves (Image: Getty)
Rachel Reeves is endangering the future of the NHS with a “double whammy” of tax increases on GPs, a leading accountant has claimed. Katie Collin, partner at specialist medical accounting firm Ramsay Brown LLP, fears the Chancellor’s plans could trigger mass surgery closures and an exodus of doctors.
Ms Collin, who advises nearly 3,000 British healthcare professionals on finance and restructuring, highlighted threats ahead of Ms Reeves’ autumn budget on November 26: a controversial National Insurance (NI) charge on partnership income and a suspected “pension tax raid” that could cut a potentially £268,275 tax-free lump sum for retired healthcare workers, The Times reported. Ms Collin warned: “If Reeves attempts a double whammy and goes ahead with both NI on partnerships and the pensions tax raid, I would go so far as to say it would disrupt the Government’s 10-year plan for the NHS.”
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Katie Collin fears tax rises will hit GPs (Image: Getty)
The proposals, drawn from advice from think tanks, initially aimed to close a tax loophole by extending employer NI contributions to limited liability partnerships (LLPs) used by professionals such as lawyers and accountants.
But the plans have been expanded to cover all partnerships, including the general partnerships used by most GP practices, raising £2bn to help close a potentially £30bn public funding gap.
The vast majority of around 8,000 GP practices in the UK – around 7,450 across the UK – are NHS contracts, leaving a smaller group of around 550 private providers potentially exposed without exemption.
Ms Collin explained the personal cost: “Ultimately this will impact on partners’ income; GPs are already considering reducing their sessions to ease the income tax burden and this extra fee will only encourage them to reduce their working hours even further.
“Given the levels of dissatisfaction already prevalent in general practices and the numbers telling me they are considering leaving… this could also result in GPs being pushed out of general practice in the UK altogether. If the partners who own their practices head for the door through early retirement or emigration, we could see entire surgeries closing.”
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Ramsay Brown’s client insights reveal the vulnerability: Most GPs keep just 30% of their earnings after tax and retirement, making additional taxes potentially “invalid” for the partnership model.
Early retirement has skyrocketed by 9.3% annually since 2008, and Ms Collin predicted there would be panic if pensions fell: “A bunch of GPs will cut and run to get their money out quickly.”
Labour’s NHS plan is based on robust primary care, targeting one full-time GP per 1,800 patients; but the UK lags behind with 2,200 patients.
Ms Collin stressed: “They have put a lot of focus on primary care since they got the keys to Downing Street and a strong GP workforce and a healthy practice network are non-negotiable as they plan to succeed.” He added: “But they won’t stay if both their pensions and their incomes fall.”
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Yesterday’s last-minute reprieve – Ms Reeves’s announcement exempting NHS GPs from NI tax – averted a £200 million loss on top of employer NI rises for a large proportion of practices last year.
Ms Collin noted: “Last year’s employer NIC increases have put significant financial pressure on practices, which have had to allocate much more money to staff costs.
“At the end of the day, it is the practice partners who shoulder this financial burden.” But he rejected this on the grounds that this was too little across the sector: while NHS practices are protected, non-NHS ones remain vulnerable and retirement fears persist amid policy change.
Ms Collin recommended the Treasury classify GP associations as “public-private partnerships”, exempt from private sector clampdowns like law firms. He insisted: “You can’t group GP practices with other private partnerships.
“These are public-private partnerships that have a hugely important role to play in the NHS and they should be treated as such.” Ms Collin warned that GPs could reduce working hours to reduce their tax burden, which could lead to “serious consequences for patient care” and increase pressure on primary care through possible closures. This risks undermining the government’s promise to increase GP capacity given current shortages.
This GP threat forms part of Ms Reeves’ wider tax measures, including an inheritance tax (IHT) restriction on cash services from wealthy estates. IHT carryovers reached £4.4bn in the first half of 2025/26, driven by static thresholds and asset inflation.
The proposals could include extending the seven-year gift window to 10 years (with wills being taxed up to ten years before death) and gifts of excess income now being immediately exempt. Business benefits will be capped at £1 million from 2026, hitting farms and firms with a 20% extra tax.
Ms. Collin demanded immediate fixes if the raises go forward. He said: “GPs have been given a significantly needed funding boost this year… but I worry these proposals will completely undermine the progress that has been made since then.
“Leavements, returns or stay-in-place benefits are vital ‘immediately’ to prevent the NHS being ‘drained’.”
A Treasury spokesman said on Wednesday: “We do not comment on speculation about future changes to the tax other than financial matters.” The British Medical Association has warned that further pressure could lead to closures, estimating an extra £865 per employee on a £30,000 salary.
