What the November 2025 Budget Means for Doctors Working in Private Practice
Each Budget brings a fresh wave of financial considerations for UK doctors, but this year’s announcements on Wednesday 26th November stand out for their scale, impact, and the far-reaching implications for those running – or planning to launch – a private practice. Whether you’re an established consultant or transitioning from the NHS, understanding how these changes affect your income, business structure, and long-term planning is essential.
In this article, we break down the key updates from the Chancellor’s statement, highlight what they mean for medical professionals, and outline the steps you can take to protect and strengthen your financial position.
A Budget Marked by Change
As highlighted in our recent webinar on Thursday 27th November, the November Budget delivered headline-grabbing reforms, including £26bn in tax increases, following the record rises announced in 2024. One of the most significant contributors is the extended freeze on income tax thresholds, which, despite appearing subtle, creates a major uplift in the effective tax burden for higher-earning medical professionals over the next several years.
Alongside this, the long-anticipated tightening of rules around salary sacrifice and dividend taxation has now been confirmed, prompting many doctors to re-evaluate how they withdraw income from their private practices.
Key Budget Measures Affecting Doctors
- Income Tax and National Insurance Thresholds Frozen Until 2031
As your earnings rise, more of your income will naturally fall into higher tax bands. For consultants with a growing private practice, this results in increasing pressure on net earnings even without headline tax rate increases.
- Dividend Tax Rates to Rise by 2% from April 2026
Dividend extraction has long been central to remuneration planning for doctors operating through limited companies. With rates set to increase, now is the time to assess whether your current salary/dividend strategy remains efficient.
- Tougher Rules on Savings and Property Income from 2027
Doctors with investment portfolios or rental properties may see higher taxation and increased reporting requirements, potentially affecting broader wealth-building strategies.
- Cash ISA Allowance Reduced for Under-65s
The allowance will fall to £12,000, narrowing the scope for tax-free saving. This makes thoughtful investment and pension planning even more important.
- Electric Vehicle Taxation Changes From 2028
Electric vehicles will shift to a mileage-based road tax model from 2028, reducing their current tax advantages. Doctors using EVs – personally or via their company – should factor this into future motoring decisions.
Specific Implications for the Private Medical Sector
Doctors running their own limited companies now face a dual challenge:
- Higher personal taxation due to frozen income thresholds
- Higher corporate taxation through increased dividend rates and more scrutiny on extraction strategies
Medical professionals with property portfolios will also see increased taxation over the medium term. Meanwhile, those nearing retirement, such as senior consultants and practice owners, should note the upcoming 4.8% rise in state pension payments.
Overall, this Budget reinforces the importance of structured financial planning, tax efficiency, and proactive strategy.
What Should Doctors Do Now?
Below is an actionable checklist, based on the recommendations shared during our webinar:
- Review Your Salary vs Dividend Strategy
With dividend rates rising, it’s essential to revisit how you withdraw income from your company.
- Maximise Pension Contributions Where Appropriate
Pensions remain one of the most tax-efficient ways to reduce taxable income—especially valuable during a long period of frozen thresholds.
- Reevaluate Your ISA Strategy
A lower Cash ISA allowance may call for revisions to your savings and investment approach.
- Reassess Your Property Portfolio
New charges and rising taxes may impact long-term returns and financing decisions.
- Plan Aheadfor EV-Related Costs
Consider how the 2028 changes may influence personal or company vehicle choices.
- Conduct a Full Tax Efficiency Review
Both your personal finances and company structure should be examined in light of the new Budget measures.
Staying in Control of Your Financial Future
The Budget serves as a timely reminder that financial planning isn’t a once-a-year task- it’s an ongoing process. As we emphasised in the webinar, understanding key deadlines, regularly reviewing your numbers, and taking ownership of financial decisions are essential to running a resilient and profitable private practice.
Long-term investing, diversification, and disciplined financial behaviour remain the cornerstones of successful wealth planning for clinicians. While the economic landscape may shift, thoughtful planning puts you in the strongest position to thrive.
Next Steps
If you would benefit from personalised guidance on how the Budget affects your private practice, the Designated Medical team offers a free 45-minute consultation with our accounting and financial experts.
You can also:
We’re here to help you navigate these changes with confidence and clarity.