New financial year – here’s a round-up of what changes could affect your practiceFeatured Products Promotional Features
Posted by: The Probe 7th April 2021
In the Budget, several changes to employment and business tax were announced which may or may not affect your dental practice, and/or your personal finances as a dental professional, going forward. Here’s a round-up.
Some rates stay frozen…
The capital gains tax (CGT) annual exempt amount (AEA) is to remain frozen at its current rate, up to and including the 2025/26 year. The inheritance tax nil rate band (NRB) and the residence nil-rate band (RNRB) will also remain at their current level up to and including the 2025/26 tax year. However, broader changes to the inheritance tax system may be on the cards in the future.
… but not Corporation Tax
What could affect your practice, if you trade as a limited company, is the Chancellor’s decision to increase the main Corporation Tax (CT) rate to 25% on profits over £250,000, deferred until 1 April 2023. For profits under £50,000, the rate will remain fixed at 19%. If a company’s profits fall between £50,000 and £250,000, the tax rate on the profits will be someone between 19% and 25%.
There’s more detail to know, of course, and although it may be two years away, now is the time to think about if the change could impact on you.
From 6 April, new rules around off-payroll working, known as IR35, came into force for the private sector. These will ensure that workers who would have been an employee if they were providing services directly, pay the same amount in income tax and NICs, broadly speaking, as other employees. Also from 6 April, employers of veterans will get a 12-month exemption from NICs for the first year of civilian employment. Certain exemptions apply, so check with HMRC.
Other things that are new and notable in business tax are for any company investing in qualifying, brand-new plant and machinery, they can claim a 130% capital allowance deduction. This deduction has been dubbed the “super-deduction”.
There will also be various changes relating to the purchase of business vehicles, to encourage people to buy low, or zero-emission vehicles, reflecting the government’s restated commitment to tackling climate change and “green” concerns, generally.
Look at the government’s website for greater detail about all these changes, and consider working with a specialist dental accountant, such as Figurit. We combine a knowledge of the dental industry and the principles of good accountancy, to help you optimise your business and personal finances.
For more information, please visit https://figurit.com
or call Figurit (formerly known as Lansdell & Rose) on 020 7376 9333.