In any election year, the Chancellor comes under pressure to make announcements that will boost their party in the opinion polls.
Before today’s Budget, Jeremy Hunt was open about his desire to cut taxes, but also that the flatlining economy and his own fiscal rules didn’t leave him much room to manoeuvre.
So, do the policies announced in the Spring Budget amount to a Budget bonus for doctors?
Taxes
The most widely trailed of today’s announcements was a 2% cut to National Insurance (NI) for employed people, which falls from 10% to 8% on earnings from £12,570 to £50,270.
The move is said to be worth £1,500 to a typical junior doctor on £65,000.
He also announced a 2% Income Tax cut for the self-employed, which includes many locum doctors, in a move he said was worth £350 to the average self-employed person.
The move comes after NI rates were cut by 2% for employed people and 1% for the self-employed barely three months ago.
But there was no action on Income Tax or Inheritance Tax.
Alec Collie, Head of Medical at Wesleyan Financial Services, said: “This will put more money back into doctors’ pockets and comes on the same day that senior doctors agreed a new pay deal.
“The Chancellor also announced a £3.4 billion package of efficiency investments in the NHS, which he says will help unlock £35 billion cumulative savings by 2029/30.
“That has the potential to ease the administrative burden for doctors at a time when they are under huge pressure due to growing demand for their services.
“An additional £2.5 billion was also found to protect real terms day-to-day funding in 2024/25.”
Savings and investments
The Chancellor also announced an expansion of Individual Savings Accounts (ISAs), which are designed to encourage more people to save and invest without paying any tax on the profits.
A new ‘British ISA’ will provide an extra £5,000 tax-free allowance for UK investments – on top of the existing £20,000 allowance.
Quite how this will work in practice remains to be seen, but it comes after a relaxation of ISA rules in November which gave the flexibility to open accounts with multiple ISA providers and make limited transfers between ISAs.
Our research found that would encourage almost a third of UK adults to invest more money into ISAs.
Alec Collie said: “As usual, the devil will be in the detail of today’s Budget.
“However, anything that can help make ISAs an even more attractive option for saving and investing is to be welcomed.
“A ‘British ISA’ will effectively increase the ISA allowance by £5,000 and builds on the ISA reforms already planned for April at a time when so many other tax allowances remain frozen.
“We will eagerly await more information on how it will be administered.”
For doctors who are lucky enough to own multiple properties, the higher rate of Capital Gains Tax for residential property disposals will be cut from 28% to 24%.
The lower rate will remain at 18% for any gains within the basic rate band and Private Residence Relief will continue to apply.
Cost of living
The Chancellor closed a loophole whereby some families would lose their Child Benefit when they began earning more, while others didn’t.
Under the old rules, when one parent was paid more than £50,000, their Child Benefit was gradually withdrawn, and removed altogether once their earnings topped £60,000.
But it created a situation where families where two parents were earning £49,999 each would still receive Child Benefit, while families where one parent earns £60,000 and the other isn't working would not receive anything.
Now the Chancellor will change the rules so eligibility is based on based on household income, not an individual's income - but not until April 2026.
In the meantime, he increased the threshold – which had been unchanged since 2013 – to £60,000, while also increasing the upper limit to £80,000.
It’s a benefit worth £24 a week for one child and £15.90 for each additional child.
He also announced a one-year extension to the 5p per litre cut to Fuel Duty, which was first introduced in the 2022 Budget and has remained in place ever since.
Alec Collie said: “Junior doctors in particular will welcome this move on Child Benefit, though it will not come into effect for two years yet.
“Still, many junior doctors face very real cost of living pressures and this will only help, when it finally materialises.”
Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Wesleyan Financial Services is authorised and regulated by the Financial Conduct Authority.