Hunt’s Autumn Statement: What’s In It For Your Practice?
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- Published: Thursday, 23 November 2023 06:35
- Written by Guy Tuggle
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At Westminster, speculation is rife that Jeremy Hunt’s days as Chancellor may be numbered.
Whilst he has signalled that he intends to stand for Parliament at the next general election, what’s less clear is that should his party win, he wishes to continue as Chancellor. It may not be his call of course.
The late Nigel Lawson, Mrs Thatcher’s ‘reforming Chancellor’ famously said that “a popular chancellor is not doing his job.” Given the headwinds facing the UK’s economy, Hunt may well be contemplating the relative merits of spending more time with his family or cashing in his chips to make millions grafting in the City. There’s little room for popularity.
But whatever the background machinations, the Chancellor who ‘steadied the ship’ following Kwasi Kwarteng’s kamikaze 2022 ‘fiscal event’ yesterday delivered an Autumn Statement that unveiled some 110 measures. And as business operators, dental practice owners will need to reflect carefully on the Statement’s implications.
Michael Lansdell, Director of one of the UK’s leading dental accountants FIGURIT (formerly Lansdell & Rose) told GDPUK that “the Chancellor used his 2023 Autumn Statement to “go for growth”.
Contemplating the Statement’s impact Lansdell said “Dental practice owners who trade as limited companies will be pleased about the Chancellor making permanent the ‘full expensing’ capital allowance, which allows companies to write off the cost of equipment purchases in one go, meaning that for every pound a company invests, their taxes are cut by up to 25p”.
Lansdell was also heartened by the Chancellor’s announcement regarding business rates support for small business which he said would be “welcome news for practice owners”.
“Most dental practice owners are surprised that many top-end practices qualify for money back from the government for what is classed as “research and development” (R&D)” said Lansdell, “and such practices should speak to someone about the R&D tax credit reforms announced by the Chancellor”.
Iain Stevenson, Head of Dental at Wesleyan Financial Services, the specialist financial services provider, seized on the cuts in National Insurance deductions.
“The cut in National Insurance will be welcomed by many dentists who are classified as self-employed, easing financial pressures at a time when the cost of living remains such a challenge.
Dental practice owners will also be happy that the 100% capital allowances on qualifying expenditure has now been extended” said Stevenson. “This will allow them to plan their investments in equipment and premises with more certainty, enabling them to broaden their range of services and capitalise on the opportunities that offering private cosmetic work can bring, for example.”
Michael Lansdell also welcomed the changes to National Insurance. “Self-employed dentists and dental practice owners will benefit from the scrapping of Class 2 National contributions Insurance altogether (currently £179.40 per year) and the cut from 9% to 8% in Class National Insurance contributions on profits between £12,570 and £50,270”
As ever, Chancellors give with one hand and take with the other. Notwithstanding the beneficial fiscal measures announced by Jeremy Hunt, they were delivered against a background of mounting doom and gloom surrounding the British economy.
Practice owners, many of whom have borrowings that run into hundreds of thousands of pounds, are having to navigate the impact of higher interest rates. Not only faced with higher repayments on their personal and business loans, many are encountering the pincer movement of their clients having to reduce their personal spending in order to manage their own domestic budgets.
When the mortgage goes up by £300 a month, a £350 course of teeth whitening is an easily postponed item of discretionary expenditure.
The overall tax burden is still on course to reach a post war high of nearly 38% and that is after the Statement’s NI reductions. Growth forecasts have been downgraded. Government debt is down but still high and inflation, whilst down, is still running at more than double the government’s 2% target.
Living standards have fallen by 3.5% since the last election – the biggest fall in living standards since records began in the 1950s. People feel poorer because they are. And public services are due to be hit with savage cuts averaging 16% that have been baked in by recent budgets but drafted so that they hit over the years to come.
Health has thankfully and necessarily been ringfenced from the cuts, but anyone expecting generous awards of the kind of extra spending required to revitalise NHS dentistry is likely to be very disappointed.
(Image: House of Commons/UK Parliament/PA Wire)
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