Rumours and reported leaks of this year’s Spring Budget have been rife, bringing with them anticipation for some much-needed support for dental professionals, both from a personal and business financial perspective.
Against a backdrop of continued high inflation, the looming rise in energy bills and industry-specific challenges around pension taxation, there were a plethora of areas to address to help retain the dental workforce and encourage early retirees back into practice.
Iain Stevenson, Head of Dental at Wesleyan, said: “Dentists – and patients – will benefit from the government’s proposals to offer corporation tax relief on new investments.
“Practices are always looking to see how they can invest to improve the quality of service for their patients. Under today’s investment measures, incorporated practices will be able to offset some of their tax bills for investment in equipment.
“We’re also pleased to see increases to the annual allowance and the scrapping of the lifetime allowance. Anything that incentivises more retirement saving is only a good thing, and this will reduce the risk of dentists leaving the profession to avoid the threat of pension tax charges.
“However, it’s disappointing to see that the Chancellor didn’t take the opportunity to announce any specific measures for dentistry, particularly increases to the NHS spending budget. In its current state, it’s no surprise that many dentists are questioning whether it’s feasible to continue providing NHS services, rather than transitioning to private care.”
Read the breakdown of what each announcement may mean for you as a dentist:
One of the biggest announcements from the Spring Budget or, indeed, compared to previous Budget announcements, are the changes to pension allowances.
It’s an area that many dental and medical professionals have struggled with, particularly with the year-on-year rise in the number of each profession breaching tax thresholds.
The annual allowance, has risen by 50%, now reaching £60,000 in tax-free savings for dentists’ futures. Further to that, the Chancellor dropped a bombshell by abolishing the lifetime allowance. Both moves are designed to remove barriers that may otherwise force experienced dentists into early retirement.
What these announcements may mean is that for many, there has never been a better time to review their pensions and retirement plans. Those that may have planned to retire early, may now be faced with new opportunities and some taxation challenges may yet still pose a problem.
While it’s fantastic news that there is more opportunity to build up pension provisions ahead of retirement, you will still need to consider tax implications on retirement income, and whether it’s more beneficial to spread those provisions into other areas of your financial plan.
Practice investment opportunities
A new capital investment opportunity will replace the 130% “super-deduction” from April 2023 until March 2026. It’s good news for incorporated dental practices looking to invest in new capital equipment, such as dental chairs or ventilation etc. The three-year scheme gives practice owners more chance to plan ahead and make full use of this beneficial opportunity.
Investments made by companies for qualifying plant and machinery will qualify for a 100% first-year allowance for main rate assets, meaning companies will be able to write off the full cost in the year of investment, otherwise known as ‘full expensing’.
Energy bill support
High on dentists’ and practice owners’ wish lists were further support with energy costs, both for their homes and for their businesses.
For homeowners, government help in the form of the Energy Price Guarantee is being extended for another three months, until June. It will remain at £2,500 for the typical household for the next three months – although it is worth highlighting that this is not a fixed price for every household and will be higher for high-energy households.
For businesses, the Energy Bill Relief Scheme will come to an end at the end of March this year and move on to the Energy Bills Discount Scheme. As with the original scheme, your energy supplier will automatically apply reductions for businesses.
Further information on eligibility and discount rates can be found here.
The chancellor announces 30 hours of free childcare for every child over the age of 9 months, which will provide support for parents whose childcare costs prevented them from returning to work. This is good news for dentists and dental staff who want to return – potentially easing some of the retention crisis that we’re currently seeing in dentistry.
The support will be phased in until every eligible working parent of under five-year-olds can access it by September 2025.
Need further support?
Announcements from this year’s spring budget may leave you with questions about your financial plans – particularly around retirement.
Book a no-obligation financial review with a Specialist Dental Financial Adviser at Wesleyan Financial Services.
Tax treatment depends on individual circumstances and may be subject to change in future.