The Autumn Budget - Winter is coming

Money is seemingly what is forever talked about in the news. We're constantly told we're in the cost of living crisis and that we're only steps away from the breadline. There are a few reasons for this, the war in Ukraine, the Covid pandemic and the period of relative boom with historical low interest rates. Those used to super low mortgage rates of less than 1% are now shocked that they are coming back to 'normal' interest rates of 5-6%. However it's not just mortgages that are now more expensive, it's everything such as milk and eggs. This has lead the inflation rate for this month to top 11.1%, the highest its been for 41 years. This makes it hard for us to afford everyday items as our wage has definitely not gone up by that amount. This disparity has led to the many strikes that have happened this year (trains, royal mail) and may lead to more in the next few months (nurses, doctors). 

We had a turbulent few months in the UK with prime ministers coming and going, first Boris was booted for having parties in number 10, so we got Liz Truss in. After telling everyone she was going to lower taxes in her campaign, she lowered the taxes which the economy hated so we got rid of her as well - spending the shortest time in office and will be likely remembered as the worst prime minister in history. Then we got in Rishi Sunak (after Boris supposedly decided not to run again), who campaigned on fiscal responsibility which kind of meant raising taxes. With the help of Jeremy Hunt, the NHS doctor's favourite MP, he reversed many of Liz Truss's tax lowering plans, and today announced his plans for the countries economy. 

The main points that I think are salient for doctors/GPs are below:

• The minimum wage is now at £10.42 / hour , up from £9.50. This is of importance to GP partners who may have to pay staff more from April 2023, thus reducing profits.
• The additional rate of tax 45% will now be paid on earnings above £125,140, down from £150,000. This will bring more people into this tax bracket. 
• All the other income tax thresholds (personal tax allowance £12,570, higher rate tax 40% at £50,271) will stay the same until 2028. This is known as fiscal drag as people's wages generally go up through the years, and so they will be paying more tax if the thresholds don't move with it.
• Tax free allowances for dividends will half from April 2023 to £1,000, then £500 in April 2024.
• Tax free allowances for capital gains will reduce from April 2023 to £6,000, then £3,000 in April 2024. 

Honestly, this is quite a crushing budget for most middle earners and high earners. The self employed GP Partner will have to worry about wage increases, and the fiscal drag plus lowering of the additional rate tax threshold means less take home pay. We do have to remind ourselves though that there are far more people that are struggling with this rising inflation, and if this helps them eventually then it's something worth going through.

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