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Rachel Reeves has been warned against enacting a plan to make NHS GPs exempt from her £2 billion tax raid on wealthy workers. The Chancellor is believed to be preparing a huge tax raid of high-earning professionals, particularly those working through limited liability partnerships (LLPs), many of whom are treated as self-employed, meaning their firms do not pay employer’s National Insurance. The sweeping measures could apply to those working for medical partnerships including NHS GPs, prompting industry figures to warn that driving up taxes will set back Labour’s plans for bolstering local care provision.

Ms Reeves has reportedly floated the idea of making national health service GPs exempt from the change as a result, but tax experts have cautioned her against what could be at best a “messy” and at worst an “insane” course of action. “We know that some practices operating under other contracts are registered as LLPs,” Kamila Hawthorne, chair of the Royal College of GPs, said. “We don’t know how many would be affected, but this measure will likely have a significant impact on their ability to hire GPs and other staff required to deliver the care and services patients need.”

Ms Hawthorne told The Times that she was “really concerned about the prospect of more tax rises being directed at some partners”, dubbing the idea of a wider partnership tax that would hit other doctors “even more concerning”.

Dan Neidle, founder of the Tax Policy Associates think tank, also said it would be “insane” to single out LLPs for taxation while disregarding other types of partnership. Writing in a blog, Mr Neidle suggested a “messy comprimise” could be drawn up by either increasing GP pay or setting an allowance exempt from the tax raid at the average GP partner’s salary of roughly £118,000.

The plans to clamp down on LLPs, linked to the Chancellor’s insistence that the tax burden be paid by “those with the broadest shoulders”, could play a key role in her effort to plug a £30 billion fiscal gap, after public borrowing reached its highest level since the pandemic.

The thinktank CenTax estimated that the changes could hit 96% of GP partners, raising £250 million for the Treasury.

The most recent figures show UK borrowing surging to almost £100 billion during the first half of the financial year, £7.2 billion more than forecast, putting increased pressure on Ms Reeves over the state of public finances.

Andy Pow, of the Association of Specialist Medical Accountants, joined the chorus of critics accusing the Chancellor of considering a policy that was “not very well thought out”.

“There are so many holes in this that I think it’s going to be quite difficult to have legislation which stops people trying to change how they operate to get around it,” he told Pulse Magazine.

It comes ahead of Ms Reeves’ Autumn Budget on November 26, where she is expected to announce other revenue-raising measures including a possible “mansion tax”, an annual levy on high-value homes, and an extension of capital gains tax to primary residences.