Month: October 2018

The Autumn Budget 2018 and Employment Law – Ben Williams Goodman Grant

The budget has not thrown up many surprises and there seems to be very little mention of the government’s efforts to provide more clarity on employment status as the gig economy continues to evolve. There are parallels that can be drawn between the uncertainties of the employment status of those working in the gig economy, with similar ongoing uncertainty in the dental sector.

The widely covered case concerning Uber drivers is currently being heard in the Court of Appeal. This may confirm the continuing general direction of travel that the courts are likely to find those falling in between the employment status of worker and self-employed contractor to be viewed as workers.

There was a recent announcement that there will be an extension of IR35 to the private sector by 2020. This is not set to affect small businesses but is a step towards addressing perceived loss of tax receipts by contractors, providing services via a personal service company.

What the budget appears to fail in addressing is the need for harmonisation of employment status so far, as HMRC are concerned with the legal employment status of employees, workers and self-employed contractors. Until then, the uncertainty continues for many businesses and those they engage with. This leaves businesses in a precarious position whereby the individual could be paying their own tax as an ‘off payroll contractor’, but at the same time, could be found as a worker by an employment tribunal with some employment rights.

The National Living Wage

The top rate of the national minimum wage (national living wage for those aged 25 and over) will increase from April 2019 from £7.83 to £8.21, which, along with an increase to the personal allowance (the point at which employees begin paying income tax), will increase from £11,850 to £12,500 in April 2019. Early analysis suggests this will make employees approximately £130 better off each year.

The personal allowance will now be frozen until 2020-21, as this increase has been brought in earlier than the government had initially anticipated.

As for the other bands of the national minimum wage, these will be as follows:

Band Current Rate (£) April 2019 (£) % increase
21-24 year olds £7.38             £7.70 4.3
18-20 year olds £5.90 £6.15 4.2
16-17 year olds £4.20 £4.35 3.6
Apprentice Rate £3.70 £3.90 5.4

 

How this will affect the amount of income tax employees will pay as the increases lift some into the realms of paying the basic rate of tax, ultimately  remains to be seen, and there may be further commentary on this from various groups in the coming days.

Looking ahead, the national living wage is set to miss the government target of reaching £9 per hour by 2020 and is, instead (according to the Low Pay Commission), to reach around £8.60-8.75 by 2020 and £9 per hour or more by 2022. It is worth dental practice owners taking note of the forthcoming increases and the forecasts from the Low Pay Commission, as part of assessing future increase in their wage bills.

Apprenticeships

In regard to small and medium sized businesses, there was a welcome announcement to cut the employer contribution to apprenticeship training from a 10% contribution to 5%, as part of a package to support and encourage businesses to take on apprentices. This is an encouraging step being made by the government and should motivate dental practice owners to take on apprentices for the first time or, indeed, increase their intake.

This is likely to only apply to new starters, rather than a retrospective cut to employer contributions.

Self-Funded Work-Related Training

Following a consultation earlier this year, there will be no extension of tax relief for self-funded, work-related training for employees and self-employed individuals.

However, there are plans to introduce a government funded National Retraining Scheme – something employers and employees should keep an eye out for, as this could provide the opportunity for individuals to develop existing skills or learn new ones. Who this scheme will be aimed at and the extent to which it will provide assistance remains to be seen. Practice owners, associate dentists and employees alike should take note of this new initiative, which should provide future opportunities for workers to upskill or develop new skills within their profession.

Caution!

As the terms of a Brexit deal (or no deal) remain to be seen, there may be a series of revisions by the government to mitigate any adversities either way. These revisions may come forward shortly after the country leaves the EU in March 2019 – whether that is from an unscheduled budget or otherwise is, of course, unknown.  

 

 

Ben Williams of Goodman Grant Solicitors – contact bw@goodmangrant.co.uk

 

For more information, visit www.goodmangrant.co.ukor contact your nearest office:

London: 0203 114 2133

Leeds: 0113 834 3705

Liverpool: 0151 707 0090

AN “AVOIDANCE” BUDGET FROM FEARFUL PHIL

This year’s Budget Speech was the first to be delivered on a Monday since 1962 and it had been suggested that the reason for this was so that the Chancellor of the Exchequer did not have to perform after PMQs on Wednesday, 31 October, thus avoiding inevitable newspaper references to horrors which too close an association with Halloween would have provoked.

But, Charles Linaker, a tax partner with UNW, which has a dedicated Dental Business Unit headed by Alan Suggett, says that Philip Hammond need not have worried because, as it turned out, none of the pre-Budget horror warnings came to pass.

In the run up to the Budget, there was speculation that pension tax reliefs would be attacked, that Capital Gains Tax Entrepreneurs’ Relief might be abolished and that private schools would have to charge VAT on their fees. All of this proved unfounded.

Nor, despite continuing uncertainty over Brexit, did Hammond attempt to postpone or reverse measures announced previously. Dentists who operate via limited companies might have expected a reversal or, at least, a freeze on corporation tax rates, a measure which would have had the added merit of being difficult for Labour to oppose. But, both the current reduced rate of 19% and the further reduction to 17% from 1 April 2020 were confirmed.

Indeed, on the personal tax side, Hammond brought forward by a year the start date for his previous commitments to increase the personal tax-free allowance to £12,500 and the basic rate income tax band to £37,500 (meaning that only if income exceeded £50,000 would the higher rate of 40% apply). These will now take effect from 6 April 2019 instead of 6 April 2020.

Of course, not everyone has the benefit of the full personal allowance. The reduction in the personal allowance for those with ‘adjusted net income’ over £100,000 remains unchanged, meaning that for 2019/20 there will be no personal allowance where income exceeds £125,000. Furthermore, the threshold where income becomes chargeable at the highest rate of 45% remains unchanged at £150,000.

Dentists contemplating major capital investment will be encouraged by the increase in the amounts eligible for 100% Annual Investment Allowance on plant and equipment from £200,000 to £1 million, applicable for two years from 1 January 2019. And those who might be considering constructing purpose-built practices, whether as companies, partnerships or sole practitioners, might find that their expenditure qualifies for a new Structures and Buildings Allowance.

While the new SBA is hardly generous, being spread over 50 years at a rate of 2% per annum, nevertheless this is a new and potentially valuable tax relief, not least because it can be taken over by successors to the original practice which has incurred the expenditure.

Some minor changes were made to the rules for Capital Gains Tax Entrepreneurs’ Relief but these are unlikely to affect any dentists contemplating retirement in the near future. Of more concern perhaps are proposed changes to the CGT rules on residential property from April 2020.

Dentists with buy to let properties or second homes will be aware that any Capital Gains on their disposal will be charged at the higher rate of 28% (as opposed to 20%). But, in addition, from April 2020, it is proposed that the CGT on such sales will be payable within only 30 days of the sale, rather than the current payment date of 31 January following the tax year in which the sale is made – a dramatic acceleration of the tax payment date to the benefit of the Exchequer and the detriment of the vendor.

Finally, on the theme of revenue raising, the Chancellor announced an extension of the “off payroll” working rules for individuals operating via personal service companies from the public sector to the private sector. While this should not impact the dental sector, it is a reminder that HMRC is still keen to have as many taxpayers as possible subject to the operation of PAYE and to recoup lost employer’s NIC, and that, in this context, the continuing self-employed tax status of dental associates cannot be taken for granted.

And speaking of status, Philip Hammond will be hoping that his own position is more secure than that of his predecessor, Selwyn Lloyd, who delivered that earlier Budget speech on a Monday 56 years ago. For poor old Lloyd was sacked barely 3 months later by a panicked prime minister. In the run up to Brexit this is a fate Hammond really will want to avoid.

Where in the UK is the tooth fairy being paid best?

Wobbly teeth are an exciting rite of passage for children anticipating a visit from the Tooth Fairy – but the going rate varies wildly around the UK, StemProtect.co.uk have found.

In a study undertaken by StemProtect.co.uk, the UKs stem cell and tooth storage bank, families were asked about the going rate for the Tooth Fairy – a tradition where parents leave money, usually coins, for their children in exchange for a lost baby tooth.

The Tooth Fairy is thought to be traceable back to early Norse and Northern European traditions, where children were paid a ‘tooth fee’ for losing their first pearly white. Despite its ancient roots, the tradition continues today, with the vast majority of parents reporting that their own version of this nocturnal visitor leaves just a few coins under the child’s pillow – a token to celebrate a childhood rite of passage.

However, StemProtect.co.uk’s research showed a variety in the amount that children received for this exciting ritual across the country.

The study, which looked at 2,000 families across the UK, showed the following ‘going rates’ for the Tooth Fairy:

Bradford – 50 pence

Edinburgh – 75 pence

Nottingham – £1.00

Manchester – £1.20

Bristol – £1.25

London – £1.50

Leeds – £1.50

Harrogate – £2.50

Children in Bradford were found to have the lowest haul from the Tooth Fairy on average at just 50 pence.

Manchester’s youngsters receive £1.20 on average, beating Edinburgh’s more modest 75 pence – and Nottingham sits squarely in the middle at £1 exactly. While London, where you might expect that the Tooth Fairy’s payouts might be higher to match the cost of living, children receive £1.50 on average – a significant percentage lower than the earnings of the lucky children living in Harrogate.

Children in the leafy North Yorkshire town were found to receive an average of £2.50 per tooth, making it the most lucrative area for losing a tooth – however, there were some isolated instances where it seemed that Tooth Fairy had really splashed the cash.

Harvey, 41, from Leeds, admitted that he eschewed the tradition of leaving coins for his child when they lost their first tooth, instead slipping a £20 note under the pillow instead. He told researchers:

“To be honest, it was a bit excessive, I’ve set a high bar for myself. I really wish I’d given less – or should that be the Tooth Fairy had given less! – but it was the first tooth and it’s a tradition.”

Anna Edwards, spokesperson for StemProtect.co.uk, noted:

“It’s clear there’s no set rate for the Tooth Fairy across the UK but many parents may be relieved to see that 50 pence is still acceptable. However, it’s also lovely to see that the tradition continues for a new generation, and it can often be a good way to talk to your children about their dental hygiene – for example, telling them that the Tooth Fairy will only leave a gift for clean teeth is usually a great motivator when it comes to the bedtime tooth brushing routine!”

Treating gum disease may help manage Type 2 diabetes, Diabetes UK study finds

  • Intensive treatment for gum disease improved blood glucose control in people with Type 2 diabetes
  • Treating oral health also linked to improvements in kidney and blood vessel function
  • Researchers hope this could provide a new way of helping people with Type 2 diabetes manage their condition

A study funded by Diabetes UK has found that treating periodontitis (gum disease) could help people with Type 2 diabetes manage their blood glucose levels, and may reduce their risk of diabetes-related complications.

Researchers at the UCL Eastman Dental Institute recruited 264 people with Type 2 diabetes, all of whom had moderate to severe periodontitis. Half of the participants received intensive treatment for their gum disease, which involved deep cleaning their gums and minor gum surgery. The other half received standard care, involving regular cleaning and polishing of their teeth. The treatments were provided alongside any Type 2 diabetes medications being taken.

After 12 months, participants receiving the intensive treatment had reduced their blood glucose levels (HbA1c) by on average 0.6 per cent more than the standard care group. This suggests that intensive gum disease treatment could help some people with Type 2 diabetes to improve their blood glucose levels.

Gum disease affects almost half of the UK population and people with diabetes have a higher risk of developing it. Gum disease sets in when the levels of bacteria inside the mouth are out of balance, and it causes chronic inflammation inside the body. This inflammation has been linked to cardiovascular and kidney complications, as well as insulin resistance.

The findings, published in The Lancet Diabetes & Endocrinology, are the first to link intensive gum disease treatment to improvements in kidney and blood vessel function and chronic inflammation. While more research is needed to explore this connection, the findings suggest that treatment may help to reduce the risk of serious diabetes-related complications, such as heart disease, stroke and kidney disease, in people with Type 2 diabetes.

The researchers also observed a link between the treatment and improved quality of life.

Professor Francesco D’Aiuto, lead researcher of the study, said: “Our findings suggest preventing and treating gum disease could potentially be a new and important way to help people with Type 2 diabetes manage their condition, and reduce their risk of its serious complications.

“The improvement in blood glucose control we observed, in people who received intensive treatment, is similar to the effect that’s seen when people with Type 2 diabetes are prescribed a second blood glucose lowering drug.

“We now need to determine if the improvements we found can be maintained in the longer-term and if they apply to everyone with Type 2 diabetes.”

Prof John Deanfield, senior investigator of the study at the UCL Institute of Cardiovascular Sciences, said: “Inflammation may be part of the biological pathways that lead to several health conditions including diabetes, heart disease, dementia and cancer.

“Our findings that reduction in periodontitis, which is a common cause of inflammation, improves vascular, renal as well as blood glucose control in people with Type 2 diabetes, are exciting and could lead to new strategies to improve care. Large-scale clinical outcome trials should now be designed.”

Dr Elizabeth Robertson, Director of Research at Diabetes UK, said: “Currently people with Type 2 diabetes aren’t given oral health advice or treatment as part of their routine diabetes care.

“While more work is needed to fully understand how good oral health could help with blood glucose management, this research gives us important insights into the potential benefits of looking after your oral health if you have Type 2 diabetes.”

Diabetes UK is the largest funder of diabetes research in the UK, investing around £7 million every year to bring about life-changing breakthroughs in care, treatment and prevention, with the ultimate aim of bringing us closer to a cure.

To find out more about diabetes, visit www.diabetes.org.uk.

The project was also part-funded by the National Institute for Health Research (NIHR), via the UCLH Biomedical Research Centre, as part of a comprehensive new research programme in the field of Oral Health.

Practice Plan runners enjoy half marathon success

A trio of women from Practice Plan are celebrating after coming top of the Ladies Large Business category at the Great Birmingham Run in October.

Lynne Womersley, Sarah Barnard and Zoe Close were joined by their colleague Gemma Mann, from parent company Wesleyan, and battled through torrential rain to take the top spot in the category for the half-marathon.

Not only that, but the team, collectively with other colleagues who were also taking part, raised more than £1,300 for the charity Partnership For Children, which promotes good mental health via school-based programmes.

Lynne, Business Development Manager at Practice Plan, who ran the London Marathon in 2004, said, “It feels amazing to have won the category, I can’t believe it… although the main reason I wanted to take part was to raise money for charity and kick-start my running again.”

Sarah, Regional Support Manager at Practice Plan, completed the race two weeks before tackling the Beachy Head Marathon. She said, “I love a challenge especially when I’m part of a team. The training was tricky but it was great to take part with my colleagues, we kept each other motivated and did virtual training together via WhatsApp.”

It was the first time that Zoe, Sales Manager at Practice Plan, has completed a half-marathon and she is already thinking about what challenge she can take on next year. She added, “The training was hard as I had a knee injury in August which slowed me down a little. I was very nervous before the race and didn’t really know what to expect, I just wanted to go out and complete the miles with my knee intact! In the end I was pleased with my time and enjoyed the experience, and the public support was fabulous – as was coming first in the challenge, girl power!”

You can still sponsor the team by visiting: https://www.justgiving.com/fundraising/gbr2018

Are you ready to test your antimicrobial prescribing knowledge?

The British Association of Oral Surgeons (BAOS) has launched a new Antimicrobial Stewardship e-Learning resource for oral health professionals to test their knowledge of antibiotic prescribing.　

Free to take, it consists of three modules of clinical scenario-based quizzes, each of which provides a printable e-certificate of one hour’s verified CPD upon successful completion. Feedback is provided along the way, with the aim that by the end of the modules, participants will be able to demonstrate application of the principles of sound antimicrobial stewardship to the clinical scenarios.

The modules were developed by Tara Renton, Professor in Oral Surgery at King’s College London, Greg Gerrard, Council Member of the BAOS, Dr Noha Seoudi, a Specialist in Clinical Oral Microbiology representing the Association of Clinical Oral Microbiologists (ACOM), and Dr Nick Palmer, Editor and co-author of Antimicrobial Prescribing for General Dental Practitioners.

Since 2015, healthcare providers in the UK have had a statutory duty to reduce the risk of antimicrobial resistance by ensuring appropriate use of antibiotics. Whilst the aim of the modules is to promote responsible use of antibiotics in oral surgery, the educational content is of relevance to all dental prescribers, including those who place dental implants, undertake minor oral surgery or practise in special interest areas, and has been endorsed by the Faculty of General Dental Practice (UK) and ACOM.

Speaking on behalf of the development team, Professor Renton said:

“Every year, 25,000 people across Europe, and 700,000 worldwide, die from antibiotic-resistant infections. Dentists issue 7% of all antibiotic prescriptions in the NHS, and the new modules can help both primary and secondary care dentists play a vital role in keeping antibiotics working.”

Autumn Budget 2018 promises benefits ahead of Brexit

Philip Hammond claimed ‘the era of austerity is finally coming to an end’ during the Autumn Budget, and for dental professionals this key annual statement held a number of important changes.

From promises to invest £20.5 billion into the NHS to a change in Income Tax thresholds, there was a lot of positive news for people working in the profession. However, debates over how self-employment should be taxed raised red flags for professionals seeking to remain under the label – resulting in possible changes in tax rates meaning that professional financial advice may be necessary heading forwards.

If you’d like to know more about the Autumn Budget and how it might affect you, contact the team of Independent Financial Advisers at money4dentists.

For more information please call 0845 345 5060, email info@money4dentists.com or visit www.money4dentists.com

 

Autumn Budget – It ain’t over until she sings… Michael Lansdell

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

The importance of written agreements – Ben Williams Goodman Grant

Other Considerations

If you do not have a written associate agreement in place, you also do not have the benefit of post-termination restrictions (restrictive covenants). This, in itself, poses a serious risk to the goodwill of your business.

In the absence of post-termination restrictions, an associate can walk out tomorrow and setup in competition with you next door the following Monday.

In any event, for a positive relationship during the engagement of an associate, a written agreement provides both parties with a clear set of terms to work under, as well as protecting the practice owner’s business interests when the engagement comes to an end.

 

Who else should have a written agreement in place?

If you engage consultants, bookkeepers or cleaners, it is equally important that each individual has a written agreement – whether as a service agreement (self-employed), a contract of employment (permanent or temporary), or a zero hours contract worker for the same reasons explored above.

Given the current climate of employment law and – in particular – employment status, it is of paramount importance that contracts and agreements are appropriate. A one size solution no longer fits all.

An investment in issuing written agreements to your staff and contractors can minimise future risks, as well as ensure you follow best practice from a HR and legal perspective.

Practitioners may be concerned that drafting fair and thorough written agreements is somewhat of a complex and lengthy task, so it may be worth seeking out reliable dento-legal solicitors who can aid in this process. The expert team at Goodman Grant have the extensive knowledge and experience required to help you put together balanced and comprehensive written agreements, so you are able to avoid the risk of disputes arising in the future.

 

Ben Williams of Goodman Grant Solicitors – contact on bw@goodmangrant.co.uk

 

For more information visit www.goodmangrant.co.ukor contact your nearest office:

London: 0203 114 3133

Leeds: 0113 834 3705

Liverpool: 0151 707 0090