Chancellor Kwasi Kwarteng has revealed a number of measures to help tackle the cost of living crisis in his first mini-budget.
With tax cuts amounting to £45 billion, this comes as the Bank of England increased interest rates to 2.25% yesterday, adding that the UK was already in a recession.
Here’s some of the key take away points:
- The basic rate of income tax has been cut to 19p in April 2023. The 45% top rate of tax for higher earners has also been abolished
- The threshold before stamp duty is due has increased to £250,000. For first time buyers, it has hit £425,000
- The cap on bankers’ bonuses has been lifted, and a planned rise in corporation tax has been scrapped
- An increase in National Insurance has been reversed. Low-tax investment zones will be set up across the UK.
Struggling with costs
Iain Stevenson, head of Dental at Wesleyan Group, the specialist financial services mutual, said: ‘Small businesses have needed help with running costs and dentists are no exception. Many practices are facing increasing costs due to the cost of living crisis, coupled with retention and pay increase considerations for staff, which are resulting in growing pressure on the bottom line.
‘Measures such as cutting National Insurance and corporation tax alongside the business energy relief scheme will go some way to help address challenges. The new investment zones may create opportunities for dentists looking to expand their practices or start their own businesses.
‘There was also a welcome development of making permanent the temporary £1 million level of the Annual Investment Allowance (AIA), which was due to expire after 31 March 2023. This is good news dentists investing in their practices – whether that’s upgrading airflow equipment to maximise surgery capacity, or investing in surgical equipment – and will help make tax simpler for them.
‘When it comes to personal finances, we know that dentists themselves are struggling with rising costs. The reversal of the National Insurance increase will see small increases in take home pay, but more help is needed to ensure dentists can cover their living expenses.
‘We know that some are reducing their contributions to their pension or even withdrawing funds from savings to cover costs. This can have serious long-term implications and should be carefully considered and ideally done with financial advice.’
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Dismayed
Healthcare workers are already slamming the government for prioritising bankers’ profits over the NHS
For example, the Royal College of Nursing (RCN) chief executive union, Pat Cullen, says cutting the cap on bankers’ bonuses shows the government has ‘the wrong priorities’.
‘Nursing will be dismayed by the decision to prioritise well-off bankers over NHS and social care staff, some of whom are using food banks and live on a financial knife-edge,’ she said.
‘Ministers have taken advantage of the goodwill of nursing staff for far too long. We’re urging our members to vote in favour of strike action when our ballot opens on 6 October.’
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