Get tax relief on practice improvements
With the ongoing debate regarding efficiency savings within the healthcare sector giving favour to the argument for more integrated services within the industry, many dental practices are having to take a good look at their existing facilities and consider whether they are ‘fit for the future’.
With this in mind, practice owners across the UK are looking at the potential for investment in their facilities to bring them in line with government health reforms and rising patient expectations.
However, while looking to improve their overall offer by undertaking investment in buildings and equipment, many healthcare professionals are missing out on valuable tax reliefs.
Paul Hulme, director at Midlands-based DJH Accountants, advises health professionals on just what tax relief is available to them and the benefits this can bring.
He said: 'Many healthcare professionals do not fully realise the benefit of the government’s Capital Allowance scheme, and are therefore failing to take advantage of the significant tax reductions it can offer. This initiative is a completely legitimate means for practice owners to alleviate some of the financial burdens associated with improving their facilities, and they could potentially be forfeiting thousands of pounds in unnecessary tax payments by disregarding it.
'The Capital Allowance scheme was introduced to provide a legal tax-saving opportunity that could see businesses save a significant amount of money on business-related expenditure. The aim of the scheme is to offer tax relief on any qualifying assets that professionals purchase for use within their practice, by letting them write off their cost against the taxable income of their practice. For example, any equipment or specialist tools can be claimed against as they are used in the day-to-day running of the business and on the same thread, so too can office furniture and computer and telephone system upgrades.
In addition, many practice owners or managers do not realise that refurbishment and renovation work that they choose to undertake within the practice can be claimed against, work such as improvements to patient waiting areas and treatment room enhancements.
The introduction of the Energy Performance Certificate (EPC) in 2008 is another area to consider, particularly when undertaking building refurbishment, as the scheme currently offers 100% tax relief on low carbon or energy saving equipment.
He added: 'The benefits of Capital Allowances for healthcare professionals are amongst the most valuable forms of tax recovery and can typically save practice owners up to 30% of the cost of a new surgery or building. With continual advances in technology, the ever-growing need to update business assets such as equipment and machinery can put immense pressure on the healthcare sector, but this scheme can enable practitioners to purchase the latest tools without exhausting a huge proportion of their limited budget.
'Taking advantage of the Capital Allowance Scheme will not only provide tax relief on current expenditure, but will also enable practices to invest this money back into the business, helping to facilitate a continual programme of enhancement for the benefit of both staff and patients. And, with the Chancellor's announcement that Annual Investment Allowances are to increase tenfold from £25,000 to £250,000, there has never been a better time to invest.'