Compared to last year's Autumn Budget, which was not only Philip Hammond's first statement as Chancellor, but also the first since the referendum result, the outcome of the 2017 Budget was perhaps the best that could be expected. True, the economy is a lot weaker than was originally estimated and growth is likely to slow over the next three years, but for dentists and small businesses there was little bad news.
Indeed, in a time of general political and financial uncertainty, any attempts by the Chancellor to help families with the cost of living and support small businesses is no doubt greatly appreciated by many. As Mike Cherry, national chairman of the Federation of Small Businesses said: "Overall, this is a business-friendly Budget. The Chancellor's vision for an inclusive economy includes a set of measures that will boost confidence across the small business community as they face extremely challenging trading conditions." Naturally, there are some that feel less positively about the Budget, but for dentists, there are a few positives to take away.
Perhaps one of the biggest announcements was that stamp duty for first-time buyers in England, Wales and Northern Ireland purchasing properties worth up to £300,000 has been abolished effective immediately. To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 property for all first-time buyers will also be exempt from stamp duty from now on, with the remaining £200,000 incurring 5%. It is predicted that 95% of first-time buyers will benefit from this and 80% will not pay stamp duty at all, so for those yet to get on the property ladder these changes could have a huge impact on savings – especially for younger dentists.
For anyone paying income tax, the Chancellor's decision to increase the tax-free allowance from £11,500 to £11,850 for basic-rate income tax and from £45,000 to £46,350 for the higher rate threshold will be welcome news. The Budget also outlined plans to raise the personal allowance to £12,500 and £50,000 respectively by 2020, which the Chancellor said showed "Progress towards manifesto commitments."
Apart from that, there wasn't anything particularly ground-breaking that will affect dentists and dental practices, though there are a few changes that are worth noting, such as the Chancellor's announcement to freeze the VAT threshold for small businesses at £85,000 for two years. For most dentists this won't have an impact, but for those that have ventured into facial aesthetics where treatments are VAT chargeable this is a positive outcome.
Alongside this, the planned cuts to business rate rises in England have been brought forward by two years, and will instead come into effect in April 2018. These rates will rise in line with the lower Consumer Prices Index (CPI) measure of inflation rather than the Retail Prices Index (RPI) as part of the Chancellor's aim to reduce some of the pressure on small businesses. Other than that, the state pension will rise by 3% as planned. While this won't make too much of a difference to dentists with a good private pension, any increase is always a bonus.
In regard to travel, some of you may have noticed that the proposed rises in fuel duty have once again been scrapped, which if you're looking to keep your petrol vehicle for longer before the eventual move to electric will help you to save money. Of course for dentists aged between 26 and 30, there's also talk of what's been dubbed the 'millennial railcard', which would provide a great opportunity for younger dentists that commute by train. If you're eligible you might even be able to potentially claim tax relief if you were to use the railcard for courses – so get in quick.
Personal finances aside, it must be said that the Budget was also quite positive for the profession from a patient standpoint. Between the £2.8 billion extra funding promised for the NHS – some of which will hopefully go towards dental services – and an additional 1% duty on hand-rolling tobacco that with luck will discourage even more patients from smoking, patients' oral health may benefit.
Looking forward to 2018, there are a few other changes already earmarked to make note of. These include the ongoing modifications to inheritance tax, continuing introduction of tax relief cuts for buy-to-let landlords, and impending reductions to the tax-free dividend allowance from £5,000 to £2,000, which will come into force in April 2018. The Independent Financial Advisers at money4dentists will keep you posted on these changes as they unfold.
All in all, it was a good Budget for dentists, and despite the current circumstances the economy is doing relatively well – which the Budget reflects. Moving forward, dentists will need to consider the possible effects of the increased base rate by 0.25%, but rest assured that there will be some savings available still as a result of the announcements made in the November 2017 statement.
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