A mostly positive Spring Budget
The Spring Budget has been announced and there were a few aspects that may be of interest to dental technicians and lab owners across the UK.
The investment allowance for businesses has risen, meaning that up to £1 million can now be spent on capital equipment in the dental lab, tax-free. This is accompanied by ‘full capital expensing’, so the full investment amount can be deducted from taxable profits, immediately. This will include spending for any IT equipment, plant or machinery in the workplace, making it more cost-effective for labs to invest in new technology.
The tax-free lifetime allowance for pensions is no more. As such, dental technicians and lab owners can now save an unrestricted amount in their pension without incurring massive tax bills upon retirement – this was previously set at £1.07 million. The annual pension allowance has increased as well, so up to £60,000 can now be allocated to your pension every year without tax concerns (up from £40,000).
Energy price guarantee extended
Of benefit from a personal perspective is the newly extended energy price guarantee. In place for a further three months – until June 2023 – the cap on energy bills will continue to limit household bills to a maximum of £2,500. At a time when finances remain tight for many people in the UK, including those across the dental profession, this could prove greatly advantageous.
For those with young families, the development of free childcare will have been a welcomed announcement. All children between 9 months and 3 years, whose parents both work a minimum of 16 hours a week, will receive access to 38 weeks of free childcare (equivalent to school term time). This will be implemented in a staged process, starting with 15 hours of free childcare for all 2-year-olds in April 2024 and opening up to those of 9 months or older from September 2024. It is hoped this will help to combat capacity issues in the sector and to ensure access for all families.
Sadly it was not all good news. Lab owners will need to be aware that corporation tax has risen from 19% to 25% for any profits over £250,000. Businesses with a taxable profit of between £50,000 and £250,000 will pay corporation tax somewhere between the 19% and 25%.
An optimistic outlook
Overall, the spotlight was placed on growing the UK economy for the Spring Budget 2023. Key themes were supporting education, getting people back to work (or keeping more people in work) and maintaining a downward trend for inflation. The announcements were generally positive for the dental lab community, although how beneficial the announcements prove to be in reality can only be measured over time.