The Social Care Levy - what could it mean for GP practices?

Our medical practices specialist, James Gransby, analyses the impact of the Social Care Levy for GP practices.

Following the government’s announcement of the Health and Social Levy, we have analysed the provisions to uncover how it will affect employees, the self-employed, business owners and those in receipt of dividends. To find out more click here.

For GP partners, there is the dual effect of:

  • an increase in personal tax bills; plus
  • an additional cost of employment for practice staff, including salaried GPs.

It’s still unclear whether the Primary Care Networks Additional Roles Reimbursement Scheme funding will be raised to accommodate the additional Employers NIC cost (rising from 13.8 per cent to 15.05 per cent), but for a GP practice whose staff costs average around £80 per patient, the knock-on effect could be considerable.

Take, for example, a 15,000 list GP practice. Its typical staff costs could be in the region of £1.2m, and its extra Employers NIC payable would be around £15,000. A five-partner practice could therefore expect an additional per-partner cost of £3,000.

The additional 1.25 per cent cost on personal tax bills would add a further £1k to £2k, depending on profit levels and number of sessions performed, and so the overall cost for an average GP partner could be around £4,000 to £5,000 each year.

The additional staff cost would attract tax relief at 40 per cent/45 per cent and so the net effect on drawings is likely to be around £3k to £4k a year (ie around £300 a month).

The £12bn being raised annually by this levy will be spent in many directions, including on reducing elective procedures and social care, so how much of it flows back into primary care to compensate GPs for the additional employment costs remains to be seen.

If you would like to discuss the impact of the social care levy on your medical practice, please contact James Gransby, our medical practices specialist.