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Ep 201: NHS 2.0?! Budget 2024 Update

On 6 March 2024 Chancellor Jeremy Hunt delivered his second Budget. Since his first Budget, it is fair to say that some economic indicators have improved including an inflation rate of 4% instead of 10.1% last time and forecasts showing that debt will fall to below 94% of GDP by 2028 and 2029, down from over 100%. However, with his headroom for pre-election tax cuts being reduced almost weekly by the Office of Budget Responsibility, the Chancellor clearly had difficulty in producing too much in terms of headline grabbing giveaways. Almost none of the measures announced today were a surprise with almost all being leaked to the papers beforehand. And the Budget overall leaves many wondering if Jeremy Hunt has done enough to shift the opinion polls before the next General Election.  As always we will leave the politics aside and let you make up your own minds about the Budget but in this brief podcast we will go through some of the main changes that will affect doctors and other healthcare professionals.


National Insurance Changes
The main headline-grabbing changes relate to National Insurance Contributions (NIC) just as in the Autumn Statement. The Chancellor announced a further 2% cut in National Insurance Contributions for employees and the self-employed from 6 April 2024, on top of the previously announced cuts.

  • For employees, including hospital doctors and salaried GPs, the 12% National Insurance Contribution Rate, which affects salaries between £12,570 to £50,270, was cut to 10% from 6 January 2024 and will be cut further to 8% from 6 April 2024.
  • For the self-employed, including GP Partners, the 9% Class 4 National Insurance Contribution Rate, which affects taxable profits between £12,570 to £50,270 will now be decreased to 6% from 6 April 2024 instead of the previously announced 8%. And don’t forget that, for the self-employed, Class 2 National Insurance is being completely abolished from 6 April 2024 as well.

Child Benefit


The Chancellor announced changes to the “High Income Child Benefit Charge” (“HICBC”) which has been unchanged since it was introduced in 2013. The HICBC  effectively claws back any child benefit paid once the adjusted net income of either the claimant or his/her partner exceeds £50,000. Once the adjusted net income exceeds £60,000 all child benefit claimed must be repaid. At Medics Money we talk a lot about Marginal Tax Rates – a parent with one child with an adjusted net income between £50,000 and £60,000 faces a marginal income tax and national insurance rate of 54% for every extra pound they earn rising to 63% if there are two children and if there are three children it rises to 71%


From April 2024 the thresholds will be raised such that Child Benefit will be clawed back once the adjusted net income reaches £60,000 and will not be fully clawed back unless the income exceeds £80,000 a move that the Chancellor says will take 170,000 families out of paying the charge. In the long term, from April 2026, the Chancellor intends to change the HICBC so that it applies to families rather than individuals to remove the inherent unfairness in the system whereby two partners with incomes of £49,000 can get full child benefit while one person with income over £50,000 will start to lose it.




The Chancellor announced funding of £3.4bn to fund “in full” an NHS Productivity Plan, which he alleges will bring 1.9% productivity gains per year in the NHS. The Plan includes, among other things, plans to cut form filling using AI, improving the NHS app to reduce missed appointments, creating a new staff app to help with staff rotas, upgrading MRI scanners and doubling the amounts invested in digital transformation and IT upgrades. He also announced an additional £2.5 billion of day-to-day funding for the NHS in England for 2024-25 aimed at reducing waiting times. Many will be treating the news of these investments with scepticism, but we will let you make up your own minds about that.


Other Measures that may be relevant

  • As was widely trailed, the Chancellor announced an additional £5,000 “UK ISA” allowance on top of the current £20,000 allowance each year. This extra £5,000 can only be invested in British stocks and shares and will receive the usual ISA tax advantages. The Government intends to consult on the details of this new ISA

  • The so-called “Non-Dom” status will be abolished from April 2025. Individuals who are resident in the UK but not domiciled here can benefit from a tax regime that exempts their foreign income from being taxed unless it is brought into the UK. From April 2025 this will be abolished – instead in the first 4 years of being resident in the UK foreign income and gains will not be taxed and after that they will be making the system simpler while raising revenue for the Government (though critics say at the risk of deterring wealthy individuals moving to the UK)

  • In one of the few surprise moves, the Capital Gains Tax rate on properties that are not the individual’s principal private residence will be cut from 28% to 24% benefiting those who invest in property. The Chancellor says that recent analysis has shown this will actually increase tax receipts.

  • The Chancellor announced another freeze in fuel duty, a freeze in alcohol duty, and a new tax on vaping products.

  • Finally, and this may be relevant to some doctors with private practice, there will be an increase in the VAT registration threshold to £90,000 from £85,000, the first increase in 7 years. Businesses can now earn £90,000 before having to register for VAT.


There were many other measures announced by the Chancellor in his speech that lasted over an hour but those were the main ones that will, or may, affect doctors and other healthcare professionals. Jeremy Hunt claims that after the measures in this budget the average earner in the UK now has the lowest effective personal tax rate since 1975; others point out that by 2028/29 the government will collect 37.1p of every pound generated in the economy – the highest level in nearly 80 years. Given the next General Election must be called before January 2025, it remains to be seen whether Mr Hunt will get to present his third Budget in March 2025. 


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