As The Chancellor, Jeremy Hunt, is set to unveil his Spring Budget on 6th March, we’re starting to predict what he could offer to the dental industry.
We’ve asked Johnny Minford, Commercial and Development Director, and Tom Slevin, Client Services Director, to share their thoughts on what might be announced in just a few weeks’ time and what it could mean for dentists.
What does Johnny think?
One of the major aspects affecting dentists at the moment is the tax rates. The Corporation Tax rate has increased to 25% – is this likely to come down? No. For individuals, the highest rate of 45% now cuts in at £125,000, which is lower than an average principal’s earnings according to the benchmarking statistics from NASDAL. This means that many more principals will be paying at the top rate of tax, without anything else changing.
The other fundamental problem that many practices are facing is related to the cost of staff. This is putting pressure on many practices, combined with the minimum living wage rise, and at the same time, shortages in the availability of suitably qualified clinical personnel. We would very much like to see an increase in the employment allowance given to employers, which has a direct effect on the cost of labour. However, this is not available to NHS practices, who are excluded from this allowance.
Another change that The Chancellor could make that would have a positive impact on practice teams would be an extension of the eligibility for funded childcare. This would help parents increase the hours they can work. Given that many practice teams have a mix of part time and full time workers, this would consequently swell the labour pool available.
Whilst generally welcomed for individuals, personal tax cuts would have a negligible effect for a business at this point. Practices need measures which will help them deliver clinical services to their patients and grow. The Spring Statement should aim at giving business confidence; giving the practice owners the ability to invest in their infrastructure and their team and build momentum.
Over to Tom
This will be a difficult budget for The Chancellor with a general election expected this year and the UK economy officially in recession.
There has been talk of an Income Tax rate reduction but if there is a cut in Income Tax, I would expect this to be in the form of an increase in personal allowance (with an increase in the National Insurance thresholds well) and an increase in the income threshold where 40% income tax is paid. This will reduce the income tax liabilities for millions of taxpayers.
Following the NHS Dental Recovery Plan announced earlier this year, it would be good to see more information on this in the budget. Wider change is required, starting with an increase in the NHS dentistry budget which would do more for improving the outlook of NHS dentistry instead of the measures announced in the recovery plan.
High Income Child Benefit tax charge has been described as unfair in its structure by Jeremy Hunt. An increase in the threshold at which the tax charge starts or basing the tax charge on family income would be a fairer move and welcomed by many dentists who pay this tax charge.
Hopefully Capital Gains tax rates and Capital Gains tax reliefs are untouched. There is always commentary about a rise in Capital Gains tax rates but for many dental practice owners who have spent years building up their business, Capital Gains tax rates increasing would be a blow if Business Asset Disposal Relief is also abolished.
So, there we have it- Tom and Johnny’s predictions for what the upcoming budget could mean for dentists.
We’ll now wait to see if they were correct. We’ll be keeping a close eye on the announcement on the 6th March and will be ready for our early-round up later that day, followed by a detailed report on Thursday 7 March.
