Laying out his third Budget as Chancellor, today saw Rishi Sunak delivering the Government’s plans for a post-Covid economy as he seeks to support the ongoing recovery against a backdrop of rising inflation and concern over the cost of living.
With a difficult balancing act to strike between supporting public services and filling the hole in the nation’s finances, we look at the key announcements and how they could affect you as a dental professional, as well as the sector itself.
There was disappointment that the Annual Allowance remained frozen at £40,000 and the Lifetime Allowance at just over £1 million, which continues to an impact on dental professionals approaching the end of their career.
Parminder Gill, Advice Policy Consultant at Wesleyan Group, said: “This is clearly a step in the wrong direction.
“The Lifetime Allowance has already been reduced by around £800,000 since 2010 and freezing the limit, coupled with the rising inflation, means more hard-working dentists are going to fall into HMRC’s scopes and could face extra tax charges.”
The new Health and Social Care Levy was confirmed at today’s budget, designed to raise £12 billion a year to tackle the backlog in the NHS and address shortages in the social care sector.
It means a 1.25% rise in National Insurance from April 2022, paid by employers and employees, and a 1.25% increase in tax on income from share dividends.
New Business Rate reliefs on green investment and property improvements will be welcomed by those incorporated dental practices that pay business rates.
Extending the £1 million annual investment allowance to March 2023 will support spending on new equipment, which can help practices that are looking to expand and grow the range of services they offer.
Michael Copeland, senior area manager at the Wesleyan Group, said: “This, alongside the cancelled increase in the business rate multiplier, will go some way to helping dentists save cash that they can put into delivering a better quality of service to patients, and meeting demand.”
Practices may also be able to benefit from the Recovery Loan Scheme, which helps companies access loans and other kinds of finance to support their recovery after the pandemic, which has been extended until June 2022.
The National Living Wage will rise from £8.91 per hour to £9.50 from April next year, while the pay freeze imposed on public sector workers last November will be lifted.
How much public sector pay packets will increase will be based on recommendations from independent pay review bodies, though it is unlikely to keep pace with inflation, which is forecast by the Bank of England at 4% for the next year.
Simon Rake, head of the teachers division at the Wesleyan Group, welcomed the news: “It remains to be seen exactly how much of an increase they will get and whether this will be an actual, real-term boost that beats inflation.
“With the country facing rising costs of living, anything less would be a real kick in the teeth, and likely only make professions like dentistry less attractive, ultimately making it more difficult to attract and retain the talent we need.”
While the national living wage increase will be welcomed by some dental practice staff, Michael Copeland warned: “For practice owners, it will naturally increase core costs – they’ll need to consider what this means for their wider practice budgets and think about how they’re positioned to meet their higher wage bill.”