Massive new tax break for dental practitioners
There is a government-backed new tax break for dental practitioners.
Taking time out to think is so important for one’s mental wellbeing. As well as one’s accounts or business planning.
A great example of this has been the COVID-19 crisis. We’ve all been so busy worrying about our lives, and colleagues and business, we may have missed opportunities to grow or change the business to better serve the needs of patients in 2021 and beyond.
This leads me nicely to talking about the Government’s March budget announcement this year. It delivered an unbelievably generous tax break for dental practitioners that some may have missed. But fear not, you have another 12 months to take advantage of it.
If you missed it, that will be because of COVID-19, as I demonstrated earlier. We have the full story on page 8.
So, buried deep was a series of tax breaks the Chancellor is hoping will help businesses unlock £20bn of investment in new assets to enhance and grow.
This super deduction allows companies to deduct 130% of qualifying investment costs from their profits when calculating the amount of tax they’ll need to pay.
It’s a type of tax break that has existed before. But this represents a huge step up from the 18% on offer previously.
Rough calculations on the back of a Private Dentistry magazine proof suggest that for every pound, their taxes will be cut by up to 25 pence.
Let’s say your practice has annual profits of £500,000 and you decide to invest £100,000 on a new dental chair and intraoral scanner and digital X-ray. The 130% deduction means, when calculating the corporate tax you will owe on your profits (around 19%), you can reduce the £500,000 figure by £130,000.
In the end, this could save you around £25,000 on your total tax bill. Before now the saving would have been £3,500.
As Stephen Price, MD of Belmont, says, this tax break is a once in a generation opportunity. There is no better time to invest in new equipment than in the next 12 months.
P.s please remember you should not misconstrue this article as professional tax advice. I’m an editor not an accountant. Seek professional assistance.