Pharmacies face closures over Budget tax hikes and rising living wage, warns sector

Pharmacy leaders have warned that tax increases and the rise in the national living wage announced in the Budget could force pharmacies to reduce their opening hours or even shut down.

The warning comes as a representative body's analysis suggests these changes could result in an estimated £200 million a year in unexpected costs. Several organisations representing pharmacists are calling on Health Secretary Wes Streeting to step in.

In October, Chancellor Rachel Reeves raised employers’ national insurance contributions by 1.2 percentage points to 15% and lowered the threshold for when this tax is paid from £9,100 to £5,000, aiming to raise £26 billion a year. She also announced a 6.7% increase in the national living wage for employees aged 21 or older – from £11.44 an hour to £12.21 – starting in April.

READ MORE: Coin expert shares rare £2 coins worth hundreds - including one with an £800 price tag

READ MORE: Brits urged to check for rare King Charles 50p coin that is 'skyrocketing in value'

These measures have caused concern among some in the healthcare sector, including pharmacists, GPs, care homes, and hospices.

Now, an analysis by Community Pharmacy England (CPE) estimates the NI increase could cost around £50 million, while the rise in the national living wage could cost between £115 million and £152 million. The CPE, along with the National Pharmacy Association (NPA), the Company Chemists’ Association (CCA), and the Independent Pharmacies Association (IPA), have written to the Health Secretary expressing their fear that without mitigation, these measures could push many pharmacies towards insolvency.

Dr Leyla Hannbeck, chief executive of the IPA, has issued a stark warning that the sector is "hurtling towards a disaster" which could "completely undermine any attempt to fix the NHS and shift care into communities". "The brutal reality is that local pharmacies have to pay their bills," she further cautioned.

"Without the mitigating action we call for, these extra costs will be catastrophic for pharmacies. We need urgent actions before these measures undermine community pharmacies’ ability to help with the NHS 10-year plan."

Nick Kaye, chairman of the NPA, labelled the Budget as a "hammer blow" to pharmacies nationwide. "Unlike most businesses pharmacies cannot pass these costs onto their patients and have limited means to absorb them themselves," he pointed out.

"Pharmacies are ambitious to expand their role and want to work with the Government to deliver the best possible services for their communities and take pressures from other parts of their health system."

A Department of Health and Social Care spokesperson said: "Community pharmacy been neglected for years, but it has a vital role to play in the shift of care from hospital to community as we reform the health service through our 10 year health plan."

"At the Budget, we announced a £26 billion boost for the NHS and social care. We are committed to working with the pharmacy sector and we will set out further details on allocation of funding for next year in due course."