Tax Changes 2025

Tax updates & their implications for private practice:

1. National Insurance Contributions (NICs)

  • If you employ staff in your private practice—like receptionists or nurses—you’ll now be paying higher National Insurance rates on their salaries. This increases your overall staff costs.
  • To offset this, you might need to adjust consultation fees or review staff expenses to ensure profitability.

2. Capital Gains Tax (CGT)

  • If you own a private practice building, the tax you pay on selling it has gone up, and allowances have shrunk—meaning less profit from a sale.
  • Investing in tax-efficient strategies, such as business reliefs, can help reduce your liability when selling assets. See the strategies section for more information.

3. Inheritance Tax (IHT) Reforms

  • If you were planning to pass your practice to family members, new tax caps on business property relief mean they may face higher inheritance tax bills.
  • This could affect succession planning and may require setting up trusts or alternative ownership structures. See the strategies section for more information.

4. Making Tax Digital (MTD)

  • If you earn over £50,000, you’ll need to maintain digital financial records and file quarterly tax updates online.
  • This could mean more admin work, but using accounting software (like Xero or QuickBooks) can simplify compliance.  Automating elements of Xero and Quickbooks is possible and will deliver greater efficiencies for your practice. See the strategies section for more information.

5. Minimum & Living Wage Increases

  • If your private practice employs staff on hourly pay, their wages have gone up, increasing your monthly outgoings.
  • Budgeting for these changes will help ensure you maintain healthy profit margins without sudden financial strain.

 

Click here to go to the next section – NHS changes that impact your private practice