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Although nothing specific for dentists was mentioned in the budget, it was a big budget with lots of different changes that will affect dentists.
As an industry, dentists spend a lot of money on plant and machinery, so you will be pleased to know that the Annual Investment Allowance scheduled to drop to £25,000 will be maintained at £200,000 for the rest of the parliament.
There will be a consultation by the government to link pensions to ISA’s, the consultation is open until 30 September 2015, so we won’t know much more about this until the Autumn. Along side this, the government is restricting the tax relief on pension contributions for higher earners by reducing peoples annual allowance by £1 for every £2 earned over £150,000 (capped to £10,000).
For those of you that have incorporated, the government is reducing the main rate of corporation tax to 19% in 2017 and 18% in 2020. This will be somewhat, if not entirely, negated by the changes to the taxation of dividends, as the government is effectively increasing the tax rate on dividends to 7.5% for basic rate taxpayers and 32.5% for higher rate taxpayers.
Lastly, for those of you looking to purchase other practices, the government is abolishing the tax relief on purchased goodwill so you won’t get tax relief until you sell your practice.
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