Tax cuts are ‘a mirage’
Chancellor’s Autumn Statement
By Douglas Shepherd
Chancellor Jeremy Hunt’s red box contained a mixed bag of financial changes coming the way of independent practitioners in 2024 following his Autumn Statement.
We reported back in November on the key changes in what was billed as the ‘tax-cutting Budget’ – but with the headline taxes we are all familiar with largely left alone, it won’t feel that way for private consultants and GPs paying their dues to HM Revenue and Customs (HMRC).
One bit of good news, however, is that Class 4 National Insurance (NI) for the self-employed will reduce from 9% to 8% from April 2024, with a further abolishing of class 2 NI which the self-employed usually pay.
Meanwhile NI for employees will reduce from 12% to 10% from 6 January 2024.
But as specialist medical accountant Ian Tongue has pointed out, these savings are likely to be offset by the freezing of income tax rates and the changes to the 45% tax threshold announced at the Spring Budget. See his detailed analysis and tips on page 12.
Andrew Pow
Andrew Pow, board member of the Association of Independent Specialist Medical Accountants (Aisma), said: ‘The bigger picture, however, is that because income tax thresholds remain frozen until 5 April 2028, more people are paying more tax at higher levels.’
Confirmation that the minimum wage is to increase by 9.8% will be setting alarm bells ringing where any doctors’ staff are paid the minimum wage or slightly higher. Accountants warned that higher-paid employees would expect their pay to increase proportionately.
British Dental Association
Meanwhile, The British Dental Association (BDA) condemned moves in the Autumn Statement that could withdraw free dental care from the long-term sick, while offering no additional resource to support the rebuild of NHS dentistry.
It said the threat to withdraw access to free NHS dentistry from those not actively seeking work would inevitably hit vulnerable patients with higher needs the hardest. Dental care is thought to be among the ‘additional benefits’ set to be lost alongside free prescriptions and legal aid.
BDA chairman Eddie Crouch said: ‘The Chancellor offered no hope to the millions struggling to secure care. He failed to offer a penny to a service on the brink, just pulling away care from the patients who need us most.
‘The Treasury will decide whether NHS dentistry has a future, but there’s no sign this Government is willing to step up.’
NHS Confederation
Dr Layla McCay, director of policy at the NHS Confederation, claimed the Chancellor had missed the opportunity to get the NHS back on track following the impact of strikes on patient care and already-tight budgets.
‘Independent experts have said that the costs so far stand at £1.7bn, yet only £800m has been allocated and mainly by raiding budgets elsewhere, which will cause long-term harm to the NHS’s ability to transform its services.’
The King’s Fund
Siva Anandaciva, chief analyst at The King’s Fund think-tank, said: ‘The Government’s NHS funding announcements have now become caught in a vicious cycle of inefficient emergency cash injections and unrealistic expectations of what the NHS can deliver in return.
‘To avoid the NHS facing a crisis every winter, ministers need to make long-term decisions that can bring demand, capacity and efficiency back into better balance.’