Autumn Budget – It’s ain’t over until she sings… Michael Lansdell
Featured Products Promotional FeaturesPosted by: Dental Design 30th October 2018
Michael Lansdell is a founding partner and chartered accountant at specialist dental and medical accountants Lansdell & Rose. Here he discusses the main points from the Autumn Budget 2018, the last before we leave the EU and one that heralded the end to austerity… or did it?
The clocks may have fallen back just two days before, but Mr Hammond’s Autumn Budget, delivered on 29th October, was the last Budget before the UK economy springs forward to a new future outside the European Union.
Also – a Budget on a Monday! This was the first time since 1962 that a chancellor had delivered a Budget on a day other than a Wednesday. Of course, if Philip Hammond hadwaited two days for the traditional midweek day of delivery, that would have meant presenting his Budget to the Commons and the British public on Halloween. Insert your own joke here – and Mr Hammond did try elevating his speech with jokes and one-liners, to let’s say a mixed reception – but with many business owners feeling more fearful as the Brexit countdown clock now ticks loudly, the Chancellor was never going to give us any frights, shocks or scary surprises.
So, on a rainy Monday afternoon, Mr Hammond delivered a Budget that was upbeat and largely positive, to boost positive headlines in the shadow of on-going Brexit negotiations and speculation about government unity. Although no deal has yet been done – and even though the Chancellor himself has previously spoken of the damage to the economy that could be the result of a no-deal Brexit – he still proclaimed that austerity is “finally coming to an end”.
Behind the rhetoric, what did the Budget mean for you? The associate, the dental practice owner (or aspiring owner) and your family? Here are the main points, unpicked.
General forecast
The UK’s growth forecast for 2019 has been upgraded, which means the general economic outlook has improved, albeit slightly. Borrowing this year will be lower than the level predicted in March.
What about individual taxpayers?
A year earlier than the change was expected, the personal allowance for higher rate taxpayers will start at £50,000 (currently it stands at £46,350). This mirrors the sweetener for basic rate taxpayers, who will now be able to earn up to £12,500 without having to pay income tax. Again, this change will now come into force next April. Looking forward to 2021, both thresholds will then rise in line with inflation. Though, if you live in Scotland you will have to wait until 12 December to find out about any changes to thresholds.
In the realm of pensions, the Lifetime Allowance will increase to £1,055 million for 2019/20. If you have an Individual Savings Account (ISA) the subscription limit for 2019/20 will remain at £20,000.
And businesses?
Key points affecting businesses, especially small-to-medium sized businesses like dental practices, include an increase to the Annual Investment Allowance (AIA) for all qualifying expenditure for plant and machinery. AIA is a tax incentive for businesses, to encourage capital investment, and will rise to £1m from its current level of £200,000, for a two-year period. Corporation Tax is still set to fall to 17% in 2020.
The government wants to rejuvenate the rather battered and bruised UK high street, and a two-year cut in business rates for retail properties with a rateable value below £51,000 was announced. How does this affect dental practices? Well, attempts to breathe life into the local communities that you serve are an important part of the bigger picture – to thrive and survive, practices need patients! It’s not just about retaining the patient numbers you have, but attracting new ones, too. A healthier high street will benefit all of us.
There will also be more time available to meet the qualifying conditions for Entrepreneurs’ Relief – 24 months, not 12 from next April. With Capital Gains Tax, the annual exempt amount will rise to £12,000 for 2019/20 (individuals and personal representatives) and for most trustees, it will increase to £6,000.
Is austerity really over?
Well, Mr Hammond ended his headline grabbing “austerity is coming to an end” sound bite with “but discipline remains”. Even in some of the measures outlined above, we can see that they are only temporary.
A red herring, then? How could it not be, with next March looming ever closer? There might even be a full fiscal event next Spring, out of necessity, depending on the outcome of negotiations.
For dental practice owners, focus on maintaining healthy personal and business finance, making any tweaks to existing structures where necessary. Look after your team well and concentrate on providing a place where people want to work and where patients want to receive care. The best advice? Keep a specialist dental accountant close!
To find out more, call Lansdell & Rose on 020 7376 9333,
Or visit www.lansdellrose.co.uk
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