The majority of GPs will face a “whopping” 60% rate of income tax on their salary, following after the announcement of the 2012 Budget.
The Association of Independent Specialist Medical Accountants (AISMA) said Chancellor George Osbourne offered “no tax giveaways” in his 2012 Budget speech on Wednesday (21 March).
“Any cuts in what GPs have to pay to HM Revenue and Customs are to be paid for by increases elsewhere,” said AISMA’s Vice Chairman Deborah Wood, who is also head of Healthcare Services at accountant firm Moore and Smalley.
Osbourne announced the tax free personal allowance threshold is to rise to £8,105 for 2012/13 and £9,205 for 2013/14.
But AISMA claim, most GPs “will take a hit”, as their personal allowance “tapers away” when their income exceeds £100,000.
“The marginal rate of income tax in 2012/13 is much higher than many realise,” said Wood.
“Effectively it is a whopping 60% on income between £100,000 and £116,660 for 2012/13 and will not be increased.”
She also said the age-related tax free allowances will “wither on the vine”.
The allowance for individuals aged 65-75 (£10,500) for 2012/13 will remain the same, as will the allowance for those aged 75 and over – currently standing at £10,660.
However, top earning GPs (those earning £150,000 and over) can celebrate a reduction in the top rate of tax – from 50% to 45% from April 2013.