NEWS

Dentist Enews December 2017

Autumn Budget 2017 Roundup

The chancellor said he had taken a ‘balanced approach’ to his Budget last month.  As expected, his speech was light on headline-grabbing finance changes - except perhaps the scrapping of stamp duty land tax for first time buyers on properties up to £300k.

Nonetheless there were some announcements that may impact on your financial planning for the year ahead:

Income tax

Both the personal and higher-rate thresholds were increased in line with inflation to £11,850 and £46,350 respectively. You may wish to reduce your income by making a pension contribution or donation to charity if you are close to the threshold.  Similarly, if you have a partner who has little or no income you could spread your income to make full use of each of your personal allowances.

Savings and investments – The ISA savings limit for 2017/18 remains unchanged at £20,000.  Those under 40 wishing to save for their first home or towards retirement may be eligible for the new Lifetime Allowance ISA - annual contribution limit is £4,000 with a 25% top up from the government.

Inheritance tax – The current threshold remains at £325k.  However some measure of relief is the increase from April 2018 of the inheritance tax residence nil rate band to £125k.  This can be added to an individual’s own nil-rate band and applied when a residence is passed on death to direct descendants.

Salary matters – The replacement of the dividend tax credit with the Dividend Allowance (DA) of £5,000 in April 2016 reduced the benefit of taking a dividend over a salary for company owners. As from next April the DA will be reduced to £2,000.

Business – The government pledged to provide a further £2.3bn of support to businesses to reduce the burden of business rates.  The rates will also switch to being increased by the Consumer Price Index rather than by the typically higher Retail Price Index from next April, two years earlier than planned.

The Autumn Budget was the first under the Office of Budget Responsibility’s new timetable. In future there will be a Spring Statement and Autumn Budget each year.

Childcare Scheme Extended

Tax-free childcare allows eligible families to claim 20% of their registered childcare costs from the government up to a maximum of £2,000 per child, per year (£4,000 if the child has a disability).

Initially the scheme was only open to parents with a child born on or after 1 April 2013.  From 24 November 2017 the service is also available to parents whose youngest child is under six or had their sixth birthday on that day.  The government intends that all eligible parents will be able to apply by the end of March 2018.

Parents already in receipt of Childcare Vouchers or Tax Credits should consider if they will be better off switching to the tax free Childcare Scheme.  If you would like our advice in this matter, please contact us.  

Time to Consider Online Accounting

The government has confirmed that it will not widen the scope of its Making Tax Digital system at least until April 2020.  This follows its announcement earlier this year that only VAT-registered businesses with turnover above £85,000 will be required to comply from April 2019.


This delay will give dentists who are not VAT-registered time to move to digital record keeping at their own pace.  Nevertheless, we would advise you plan on the basis that ultimately the proposed MTD requirement to file quarterly returns of income and expenditure to HMRC will be implemented.

Moving your accounting online will enable you to keep on top of your financial affairs, closer to real time, and make better business decisions.  We offer two online accounting packages, Xero and QuickBooks Online, which we have adapted to suit the needs of dentists.  For more information or to arrange a demonstration please contact James O’Leary on tel 023 9248 4356 or email jol@morriscrocker.co.uk     

And finally …

A reminder that your 2016/17 tax return should be filed with HMRC before midnight on 31 January 2018.  If you normally pay your tax liability with your personal credit card, please note this service is being withdrawn from 13 January.  Let us know if you would like our help in completing your tax return.

For more information about our services for dentists please visit our dental accountants page.

04/12/2017