The summer budget was announced by the Chancellor, George Osborne on 8 July 2015. The changes brought by this budget have some impact on dentists and dental practices.

Annual Investment Allowance (AIA)

Before the announcement, the current limit of £500,000 was due to reduce to £25,000 on 1 January 2016. Now, the AIA would be increased to £200,000 permanently from 1 January 2016. So, it is a good news for the dental industry because it usually spends a lot money plant and machinery.

Employment Allowance

From April 2016, the current £2,000 allowance will be increased to £3,000 which cannot be claimed by the dental practices with more than 50% NHS activity. However, such allowance will be available to employers with more than one employee.

Goodwill

The government is abolishing tax relief on purchased goodwill. So, being a dental practice, if you are thinking of purchasing other practices, you cannot enjoy the tax relief until you sell your practice.

Dividends

From April 2016, a £5,000 Dividend Tax Allowance (DTA) will be introduced. According to this DTA, not a single percent will be charged on the first £5,000 of dividend income only.

The new rates of tax on dividend income exceeding the £5,000 allowance will be 7.5 % for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers.

Corporation Tax

If you are incorporated, here is another good news. The government will reduce the main rate of corporation tax from the current 20% to 19% in 2017 and 18% in 2020.

Pensions

From April 2016, there will be restrictions by the government for the individuals with income of more than £150,000. For every £2 of income over £150,000, £1 from the annual allowance will be reduced by a maximum of £30,000, leaving a minimum of £10,000.

Any dentists seeking help or expert advice on these issues, feel free to contact our dental accountants in London at 020 7060 9556 today.