What the Budget means for GPs: local pay bargaining, personal allowance and tax changes

Plans for local negotiation of public sector pay will not affect GP income and could even take pressure off some practices when negotiating with staff, medical accountants have said.

Mr Osborne also announced a cut to the 50% tax rate for the highest earners.
Mr Osborne also announced a cut to the 50% tax rate for the highest earners.

Presenting the Budget today chancellor George Osborne said that from this year ‘some departments will have the option of moving to more local pay for those civil servants whose pay freezes end this year’.

Russell Finn, principal with specialist medical accountants Ramsay Brown, said that GP pay would be unaffected by the plans, since GP pay was frozen.

However Mr Finn said that changes would help to ‘take the pressure off’ some practices by stabilising staffing costs.

He said that practices outside of London weighting, in areas such as Wales and Scotland, could see their staffing costs remaining level, rather than increasing, due to the changes.

‘Nurses’ pay is currently increased centrally. The changes mean that increase will now be negotiated locally,’ he said.

Changes announced today included an increase to the personal allowance – the amount a person is able to earn tax free – to £9,205.

However Mr Finn said that changes to lower the 40% tax band by around £1,000 would leave both partners and salaried GPs slightly worse off next year.

A GP earning £120,000 will be around £65 worse off in 2013/14 and a salaried GP earning £60,000 would also be around £65 worse off, Mr Finn said.

Mr Osborne also announced a cut to the 50% tax rate for the highest earners. This will now be reduced to 45%.

Although this will not affect a large number of GPs, those earning over £187,000 a year are likely to benefit from the change, Mr Finn said.

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