Chancellor Jeremy Hunt presented his Spring Budget on March 6, 2024, in a speech that will change little for the overall performance of dentistry in the UK. But it may make small waves for both dentists and patients alike.
Amongst the cacophony of shouting within the House of Commons during the hour-long presentation, Jeremy detailed a variety of tax cuts that were expected by many. He closed with another headline slash of National Insurance by 2p, as had been predicted by many outlets in build-up to the event.
Aside from big investments into the NHS, with £3.4bn committed to a new ‘Productivity Plan’ intended to revamp technological systems in the general health sector, other changes will impact dental professionals more directly.
Saving you money
The cut to National Insurance contributions followed the reduction of 2p in autumn 2023. Since before that budget, it has therefore dropped by 4p, from 12 per cent to just eight per cent. The new change as of April 6, 2024, sees someone who earned £50,000 save nearly £1,500 over the course of a year.
For self-employed clinicians, Jeremy’s Spring Budget brings even better news for National Insurance contributions. 2023’s Autumn Statement told of a reduction in National Insurance Class 4 rates from nine per cent to eight per cent on April 6, 2024. This time round, however, Jeremy dropped this a further 2p to just six per cent. As well as this, Class 2 self-employed NICs are being abolished entirely, saving individuals £3.45 a week compared to the 2023/24 rate.
Dental professionals will have a greater volume of income freed up, which they may want to put into an effective savings pot over time. Jeremy’s newly introduced £5,000 UK ISA tax allowance, which provides an extended allowance on top of those currently in place, may be ideal for some. It will be subject to a consultation that runs until June 6, 2024, and allows individuals to “invest in the UK”, but you should consult a financial adviser when deciding if it is for you.
Loan extension
Some practices will be pleased to see Jeremy’s Growth Guarantee Scheme, which will now run until the end of March 2026. Aimed to help small and medium enterprises (SMEs) with a turnover of less than £45m, the scheme offers a 70 per cent government guarantee on loans of up to £2m in Great Britain and £1m in Northern Ireland.
Introduced in the summer of 2022, its extension is designed to help these businesses grow and invest in themselves. Consulting with an experienced financial adviser could help you identify whether this loan is beneficial to your practice and can allow investment for growth of your own. You should be aware that whilst the government guarantees 70 per cent of the finance to the lender, you are always 100 per cent liable for the debt as the borrower.
Other headlines
There are a variety of other announcements within the budget which dental professionals should be aware of. The chancellor unveiled plans relating to the tax on alcohol, vaping products, and tobacco, which can each affect oral health.
Alcohol duty will freeze until February 2025. It had been due to end in August, but many patients will favour the stability for the rest of 2024.
Those who use vaping or tobacco products are not so lucky, with a new tax on the former due to begin in October 2026 following extensive consultations. The tax could discourage some people from the habit, but it is unlikely to shift public actions completely.
A one-time increase to the tax on tobacco has also been announced in an attempt to maintain the financial incentive to opt for vaping over smoking. Some patients may change their habits as a result.
Property taxes fell, with the higher rate of property capital gains tax falling from 28 per cent to 24 per cent. This will benefit some people looking to sell a residential building in the near future. The drop will affect those at the higher or additional tax rates and may mean you retain more money to invest in future purchases.
Expert advice
Jeremy Hunt’s Spring Budget may have taken some headlines with various forms of tax reductions, but it can often be difficult to follow each nuance and understand how it truly changes life for you.
Consider speaking to Money4dentists in a free consultation to see how this Spring Budget affects you and your practice, and receive advice on a variety of financial subjects from professionals that know dentistry like no others. The team have worked exclusively with dentists for decades, and offer help with both professional and personal finance.
As new changes take effect, it’s important to fully understand how this budget affects your income and professional finances. The smallest changes can save you thousands, and it is worth delving further into it to learn more.
For more information visit www.money4dentists.com