Budget 2015
The Chancellor of the Exchequer, George Osborne, has delivered his second Budget of 2015. Following the promises made in the election campaign the main focus was, unsurprisingly, on cuts to welfare spending. Nevertheless, there were items of interest to dentists as Jon Drysdale explains:
Two tax measures will benefit most dentists
First, the higher rate threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17. This will undoubtedly benefit many dentists as the majority are higher rate taxpayers. The amount people will have to earn before they pay tax at 40 per cent will increase from £42,385 in 2015-16 to £43,000 in 2016-17.
Second, the tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in April 2016. The tax-free Personal Allowance – the amount people earn before they have to start paying Income Tax – will increase to £11,000 in 2016-17.
Buy–to-let landlords lose tax break
Many dentists invest in buy-to-let property – a strategy that is already under pressure from decreasing yields. Landlords who currently receive tax relief at 40 per cent and 45 per cent on their costs – including mortgage interest – will be restricted to claiming 20 per cent. This is to be phased in by April 2020, and puts further pressure on buy-to-let yields.
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