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March Budget – Key Points for Doctors and Dentists

Leading up to the budget announcement on 11 March, speculation about what exactly would be included was rife. Now the wait is over, and the chancellor has described the budget as the “largest sustained fiscal boost for nearly 30 years”. Here are the key points for doctors and dentists.


This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice. 


Chancellor Rishi Sunak debuted a £30bn plan to boost the economy while also prioritising public services, in particular, ways to survive the coronavirus outbreak.

We’ve rounded up the most relevant points that might affect most doctors and dentists.


Public Services

Top of mind for the chancellor whilst revising this budget was the outbreak of the coronavirus and how to help the country through.

The resolution? £30bn in spending.

Included in the budget is a £12bn fund specially allocated to deal with the coronavirus outbreak, including a £5bn emergency response fund to sustain the NHS and other public services and a £500m hardship fund for local councils to aid their area’s most vulnerable.

As well as £6bn in extra NHS funding over the next five years to fund staff recruitment and hospital upgrades, there’s £7bn dedicated to business and workers across the UK.


Coronavirus and sick pay

It also confirmed that if you’ve been advised to self-isolate, statutory sick pay will be available, regardless of whether or not you’re actually displaying symptoms of coronavirus.

If you’re self-employed, you’ll be eligible for Employment Support Allowance starting from day one, no longer after a week.

“Business interruption” loans of up to £1.2m will be available to small business firms. And those businesses with fewer than 250 people working there will be refunded for sick payments for two weeks.


NHS pensions

Promised within the budget is a solution to the NHS pension problem – a result of the tapered allowance rules.

Tax on pensions paid by high earners, including a disproportionate amount of NHS consultants, will be recalculated in an attempt to resolve staffing issues after doctors and dentists were forced to cut back on working hours to avoid hefty tax bills.

The changes are aimed at those earning up to £200,000 per year, and two thresholds will be raised so tax penalties will have a lesser effect. However, pension tax breaks will be reduced for those on £300,000 plus a year.

Initial figures suggest that 98% of consultants and 96% of GPs will no longer be affected by the tapered allowance. The budget did however stop short of abolishing it altogether.


Taxes

The National Insurance Contribution threshold will increase from £8,632 to £9,500, removing the liability for 500,000 employees. On average, you’ll be £85/year richer if you earn more than £9,500. No other news about income tax, national insurance, or VAT in this statement.


Impact on business

Entrepreneur’s Relief remains mostly intact – with the exception of the lifetime allowance, which will be slashed from £10m to £1m. A £3,000 cash grant will be made available to companies that qualify for small business rates relief.


Housing

From April 2021, a 2% stamp duty surcharge will apply to foreign buyers looking to purchase properties in England and Northern Ireland.


Overall outlook

The new forecast for the economy is just 1.1% growth this year, down from 1.4% as predicted last year. Without even factoring in the coronavirus outbreak that has impacted globally, it stands to be the slowest growth in over a decade.

A comprehensive guide to the budget will be available to Dental & Medical Financial Services newsletter subscribers, subscribe today so you don’t miss it!

Schedule time with our lead financial adviser to review your financial plan and adjust it accordingly based on the outcome of the budget.


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