Spring has sprung – but what does the Spring Statement mean for you?
As England bathes in unexpectedly temperate March weather, Rishi Sunak stepped up to deliver a relatively highly anticipated Spring Statement.
With costs of living soaring, a fuel crisis and other fairly significant issues impacting the funds of millions across the UK, many turned to the Spring Statement for answers. While Rishi assured listeners that the statement “builds a stronger, more secure economy for the United Kingdom” there was little said that was good news for those already struggling. However, there are measures that are beneficial to many, and key changes on the horizon that will certainly help a little bit, if not a lot.
So, what did the Chancellor bring to the table? Here are some key changes that may impact dental practice owners moving forward:
National Insurance threshold raised
From July, workers will be able to earn £12,570 a year without having to pay any Income Tax or National Insurance. While this is unlikely to make a huge difference to the majority of dental staff, this is still a significant tax break for millions of workers in the UK and will inevitably go some way to easing some of the financial pressure that these individuals are facing.
Those of the team on lower incomes such as dental nurses will benefit most from this change, and this measure could lead to up to £330 per year of savings for everyone. Perhaps, this small amount will go some way towards helping individuals to cope better with the current financial crisis, but only time will tell.
A slight cut to Income Tax
Heralded as a historic move, the Chancellor announced that the basic rate of Income Tax will be cut from 20p to 19p in the pound by 2024. While it may not sound very substantial, this small alteration is estimated to equate to a £6 billion tax cut for over 30 million people. However, while this sounds like a marvelous move, this small adjustment, alongside the others announced in the Spring Statement, will probably not have any realistic benefit as any savings are absorbed by rising costs elsewhere, especially if this change isn’t going to be implemented for some time.
A further reason to go green
If you’re still unsure whether green energy is the way forward, the Spring Statement introduced another perk to sweeten the deal – 0% VAT for green initiatives for 5 years.
This means that any measures such as solar panels, heat pumps and even building insulation will see significant savings, further boosted by the UK government aiming to remove any red tape imposed by the EU. Under these conditions, a property with solar panels could see significant tax savings and cheaper energy bills. For those that already have, or are considering electric vehicles, solar panels can really reduce vehicle running costs which helps towards a household’s overall outgoings.
For a dental practice, this could very well be a viable move, especially if you have already costed the expense of installing solar panels and are keen to proceed. However, while this is certainly an admirable idea, it doesn’t quite take into account the viability of these measures for the majority of people and their personal properties – many of which will be unable to afford the initial outlay of funds for installation of these eco-friendly solutions in the first place. Some providers do offer interest free loans, so worth shopping around to ensure you are getting the best deal possible.
Giving local authorities the power to help
Another measure announced to help lessen the sting of the rising cost of living was that the current Household Support fund would be doubled to £1 billion. These funds would be given to local authorities to help those most in need and this should definitely help add a safety net for some people suffering.
Again, this is a fund for those who are really struggling and unlikely to impact the members of your team too much, but it’s good to know that this help will be available, even if it’s unclear how local authorities will be allowed to dispense these funds and what criteria will need to be met for people to make use of them, as well as how far £1 billion will reasonably stretch in the grand scheme of things.
Fuel duty slashed
With fuel becoming almost unimaginably expensive in recent times, the announced 5p cut per litre definitely sounds like a rosy proposition, especially as it is the biggest fuel cut rate to have ever been announced. Additionally, this cut will be effective from 6pm this evening and last for a whole year, granting significant savings over time.
This will definitely make filling up a little cheaper, but with such astronomic increases in recent times, it’s unfortunately a measure that simply isn’t enough for the average person looking to run a vehicle. This cut will help all of us save a little, but it does certainly have an element of “too little, too late” especially as it doesn’t really address the root of the problem – rising costs in general.
Ultimately, those looking towards the Spring Statement for a solution to any significant problems are likely to have been left feeling disappointed. With costs of living still rising and making many of these measures effectively defunct for those already struggling, the Spring Statement feels comprised of hollow moves with little benefit.
However, for dental practice owners there are crumbs of benefit to be had. It may very well be a chance to move into greener energy if you’ve been considering it already, and the lower paid members of your team could see some minimal benefits thanks to the change to National Insurance.
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