Michael Lansdell breaks down the changes announced in the Spring Statement.
The Spring Statement is not intended as a time for tax changes to be announced. But with the cost of living crisis taking hold in the UK, and the war in Ukraine with sanctions that the chancellor said are not “cost free for us at home”, Mr Sunak responded to growing pressure to ease the burden on families, workers and businesses.
In the immediate aftermath of the statement, the government was criticised for not doing enough to help families deal with rising bills. But how will the new measures affect you as a practice owner?
Fuel and VAT cut for going green
VAT on energy-saving equipment, such as solar panels, heat pumps and other devices has been cut from 5 per cent to 0 per cent for a period of five years. So, if you’re installing such items, you could enjoy both cheaper bills and save tax.
There are other green tax reliefs available for business owners to take advantage of. Taking steps to enable your practice to run in a more environmentally friendly way means you will improve their energy efficiency and reduce your bills. Take a look at the government’s website to see the reliefs and schemes for different types and size of business.
The cut in fuel duty was widely expected, and you won’t have missed the increase in price at the pumps. Fuel was cut by 5p per litre, to last until March 2023. If you drive to work, or between practices, have you considered switching to an electric or hybrid vehicle? Again, the government website has information about how a move to greener driving can be financially rewarding as well as better for the planet.
National Insurance and income tax
For some months now, there have been calls to abolish the planned increase to NICs from April, intended to boost funds for health and social care. The chancellor didn’t U-turn here, rather he increased the threshold at which contributions are paid, to £12,570, to start from July. This is a rise of £3,000 and represents a “simplification”, said some, equalising the NICs threshold with the personal income tax allowance. If you are an employer, the Employment Allowance that offsets the Secondary Class 1 NI is also set to increase, from April.
Looking forward to April 2024, the income tax basic rate is set to be reduced, by one per cent, to 19 per cent.
Limiting damage to the UK’s economic post-pandemic recovery, whilst trying to protect as many workers as possible from the rising cost of living, meant the chancellor had a tough balancing act. If you want to explore options on how to be more tax efficient, and optimise your personal and business finances, give Figurit a call. We have years of experience working with dental clients, we understand the market as well as tax, and can offer quality advice and guidance on a wide range of matters.
For help with business or personal tax planning, call Figurit on 020 7376 933.