Autumn Budget 2021: Recovery and opportunity (but not for everyone)
Rishi Sunak opened the Autumn Budget 2021 with unbounded optimism for the future – quickly stating that with employment rising, wages increasing and post-Covidrecovery in action, we would soon have “A stronger economy for the British people.”
Despite this strong start, however, the Autumn Budget paints a fairly unexciting image for the future – unless, of course, you’re planning on taking some short haul flights or areparticularly keen on English wine (more on this later).
So, what can dentists expect following the Chancellor’s speech?
Rising inflation and energy prices
Inflation is set to rise from 3.1% (September 2020) to 4% over the next year, making everyday prices more expensive for all. While this is likely to help the economy recover, it will have far-reaching effects on members of every practice, especially hitting those with the lowest incomes. Reasoning behind this big increase was blamed on the reopening of economies post-Covid (though the virus is very much still here) and a higher global demand for energy – a fact that has seen oil, coal and gas prices doubling in recent months.
Of course, the knock-on effect of this will be that running costs of your business are likely to get higher too. As such, it may be smart to finally take the plunge and explore some of the green energy opportunities out there.
A cash injection for the NHS
A £5.9 billion cash injection has been announced for NHS services in an effort to help clear treatment backlogs and improve existing technologies in these settings. Of course, dentistry wasn’t mentioned by name here, so it’s impossible to tell what level of these funds NHS dentists will be able to utilise, but there is potential for this to help struggling NHS dental services. There was also the promise to build 40 more hospitals by 2030 and upgrade 70 existing hospital buildings, potentially opening doors for dentists who work within these settings.
Public sector workers can also look forward to their pay levels unfreezing and the potential for a raise – though the Autumn Budget was remarkably vague on figures.
Opportunities for small businesses
One opportunity that dental practice owners shouldn’t pass up is that, from 2023, there will be no increase in business rates if businesses have improved their infrastructure. This means that a dental practice could, within reason, add a new surgery or install solar panels all without extra cost – definitely something to consider if you have any plans for the future of this nature. This is made sweeter by the proposed increase in business rates for next year being scrapped entirely.
The Annual Investment Allowance limit of £1 million has also been extended until 2023 – so if you haven’t bought that new piece of technology for your practice yet, there’s still time to do so and benefit from the cost being 100% tax deductible. One thing to bear in mind is that fixtures such as charging points for electronic vehicles also count – if this is a path you’re thinking of taking.
Investing in education
One of the core messages that resonated throughout the Autumn 2021 Budget was how the government was going to improve educational opportunities for all. The relevant part of this for dentists was the commitment that adult learning opportunities would be funded and supported, alongside an increased focus on scientific advances.
These may not be dentistry specific, but they could lead to better educational support for those within the profession, as well as new products, methods and other advances in the industry as a whole.
Every little helps
As suspected, the National Living Wage has increased to £9.50 an hour. This will onlyaffect the lowest paid individuals in practices and should see their income increase by over £1000 per year as a result. However, the increase in National Insurance and rising prices of everyday living are likely to make this perceived increase mean very little.
Fuel Duty has also been frozen, helping to keep road travel more affordable. This, coupled with significant investment in improving road qualities and public transport, may very well make commuting for everyone just that little bit better.
Long-haul flights are likely to get more expensive, but short-haul flights are set to be cheaper. Plus, certain types of alcohol will be more affordable and others will be a bit pricier – it all depends on the strength. This change was bolstered by the promise that it will lead to a healthier nation – a claim that could see fewer people heavily drinking and less negative impact on oral health as a consequence. Or, everyone will just swap to more affordable tipples – but the thought is there. So, heading to a conference by flight could well be cheaper than rail travel – an interesting thought as we are soon set to host COP26.
In a nutshell
Ultimately, the 2021 Autumn Budget holds some thought-provoking opportunities for dental professionals if you are willing to take them. With the chance to invest in technologies and improve your business infrastructure on the table, there is a silver lining to a budget that sounded good, but in reality, couldn’t quite hide the cracks underneath the optimism, especially for the lower earners in the country.
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