Autumn Budget 2022: how does it impact dentists?
The Autumn Budget has been looming over us since the disastrous results of the Mini Budget became clear, and many have felt a sense of trepidation for what this next fiscal update could have in store. Indeed, with Britain now officially being declared as in recession, people tuned into the Budget to see how the Government would cope with the current economic challenge.
For dentists and their teams, there were some significant announcements made that will impact personal finances, so let’s have a look at these in detail:
Taxations and wages
The threshold for those who are required to pay the highest level of Income Tax has been lowered from £150,000 to £125,140. This means that individuals will be taxed the additional rate of 45% on anything they earn over the £125,140 sum. As a high-earning profession, this is likely to mean that a number of dentists will end up paying more tax– something that will need to be to be considered for any future financial planning.
Income Tax, Personal Allowance and Higher Rate thresholds have been frozen for an additional two years, alongside National Insurance and Inheritance Tax, meaning that these will remain the same until April 2028. This is beneficial in some way as it means that there is predictability for taxes in these areas.
From April 2023 the National Living Wage will be increased from £9.50 an hour to £10.42. For dental nurses or any other individuals on an hourly pay structure, this will provide them with more income – though it will also have to be factored into the business costs of your dental practice(s), too.
The energy crisis
The sharp rise in energy costs has been affecting everyone, and this has not gone unaddressed in the Autumn Budget. Helpfor people to cope financially with the rise in energy bills is being extended, but it is less generous than previous announcements. There is targeted support being rolled out that will aid the most vulnerable. Unfortunately, these measures won’t be accessible to everyone, and the average household energy bill is forecasted to rise to £3,000 next year.
A Windfall Tax on profits generated by oil and gas companies has also been increased from 25% to 35%. There will also be a new, temporary tax of 45% on all companies that generate electricity. These measures, alongside increased investiture in renewable energyand the manufacture of the Sizewell C nuclear power plant should help bring down energy prices in the long-term, meaning that business operating costs and home energy bills will hopefully fall alongside. Of course, these are not measures that can all be implemented swiftly, so for now we’ll all have to tighten our belts.
NHS expenditure, pensions and more
As ever, NHS dentistry was not explicitly mentioned in the Autumn Budget. However, the NHS budget will increase in each of the next two years by £3.3 billion – some of which will inevitably go towards supporting NHS dentistry on some level. There was also talk of NHS reforms to make the service more efficient and less expensive which could impact NHS dentistry as well. Without clear plans in place, however, this increased budget may only amount to a band aid on a bullet wound – though time will tell.
Those saving toward retirement will be pleased to hear that state pensions will rise in line with inflation (10.1%). Additionally, rent rises in the social sector will be capped at 7% in the next financial year, which could offer some additional peace of mind for anyone on your team to whom this applies.
Those who regularly travel around the country may be pleased to hear the go ahead for plans such as Northern Powerhouse Rail and HS2 (it will certainly make visiting conferences and exhibitions more convenient!). However, those who have decided to take the plunge and invest in an electric vehicle will not be thrilled to hear that from 2025 these vehicles will be subject to Vehicle Excise Duty.
As ever in these fiscal statements, eyes were to the future of our country and how to improve opportunities for everyone. While again, none of this is dental specific, an extra £2.3 billion per year for the next two years for schools should help ensure that dental degrees continue to receive bright, talented individuals.
A measured Budget in chaotic times
Thankfully, the Autumn Budget 2022 was a far cry from the risky and ultimately damaging measures that were set out earlier this year by the Kwasi-Truss duo. Despite setting out billions in tax rises and spending cuts, it wasn’t quite as shocking as many feared – though, it could be argued, that the measures that were announced are likely to do very little to tackle the main crises the country is facing head on.
Much in the theme of previous budgets, a number of the positive measures may be rendered ineffectual due to the energy crisis continuing. We just have to hope that this budget has the desired effect of causing inflation to fall, giving everyone better value for the money we earn in the future.