The House of Lords has voted to exempt primary care, including GP practices, dentists and pharmacies from having to pay increased National Insurance contributions (NICs) from April.
The amendment to the National Insurance Contributions (Secondary Class 1 Contributions) Bill says that specified employers, including those contracted to provide NHS GP services, should only need to contribute 13.8%.
This would freeze their contribution at the amount previously paid in employer NICs rather than the rise to 15% announced in the 2024 Autumn Budget.
The amendment also covers NHS-commissioned hospices and charities providing health and care services.
Serious concerns were raised last year that following the Budget announcement of the rate of employer National Insurance Contributions (NICs) increasing to 15%, as well as the National Living Wage (NLW) rising to £12.21 an hour, with practices expected pay thousands more from April.
Introducing the amendment, Liberal Democrat peer Baroness Barker said that ‘in the health and social care sector, the sudden imposition of these changes to national insurance, along with the increases in the minimum wage, are going to threaten the existence of large numbers of providers and have a profound impact on budgets’.
And while the Government has already set out exemptions for some employers such as NHS hospital trusts, these do not apply to GP practices and other employers.
The relevant clause said: ‘This amendment… provides that care providers, NHS GP practices, NHS commissioned dentists, NHS commissioned pharmacists, charitable providers of health and care, and those providing hospice care would continue to pay contributions at current rates.’
After a debate in the House of Lords on Tuesday this week, the amendment was passed, with 305 peers in favour of it and 175 peers against it. This included 200 Conservative peers and 64 Liberal Democrat peers in favour, and 159 Labour MPs who voted against the amendment.
On 4 March, the bill will have its third reading in the House of Lords, which will be the final opportunity for peers to amend the bill.
Following this stage, the bill will go back to the House of Commons for consideration of amendments. MPs can decide to agree or disagree with the amendment, or propose changes, before the bill can receive Royal Assent.
The BMA has estimated a total increase in costs for GP practices in England of £180-200m due to the April tax changes.
Last week, the union’s GP Committee England (GPCE) agreed a contract deal ‘in principle’ which will see almost £800m invested into the global sum, as part of a £969m total funding uplift for general practice.
A version of this article was first published by our sister title The Pharmacist.
