Mini-budget and the impact on dentists. Last Friday the new Chancellor, Kwasi Kwarteng MP, launched the Government's 'Growth Plan 2022', which is effectively a mini-budget. Here’s some of the key take away points:
- The basic rate of income tax has been cut to 19p in April 2023. The 45% top rate of tax for higher earners has also been abolished.
- The threshold before stamp duty is due has increased to £250,000. For first time buyers, it has hit £425,000.
- The cap on bankers’ bonuses has been lifted, and a planned rise in corporation tax has been scrapped.
- An increase in National Insurance has been reversed. Low-tax investment zones will be set up across the UK. Measures such as cutting National Insurance and slashing the planned increase Corporation Tax alongside the business energy relief scheme will go some way to help address challenges. The new investment zones may create opportunities for dentists looking to expand their practices or start their own businesses.
There was also a welcome development of making permanent the temporary £1 million level of the Annual Investment Allowance (AIA), which was due to expire after 31 March 2023. When it comes to personal finances, we know that many dentists are struggling with rising costs. The reversal of the National Insurance increase will see small increases in take-home pay, but more help is needed to ensure dentists can cover their living expenses.