What might a change of government mean for dentists?

Dental Regional Manager, Neil Richardson, for Wesleyan Financial Services, shares his views on what could possibly change for dentists under a new government.

In the run up to this election there have been several announcements about what won’t change; however, some areas have not been discussed which could lead us to infer that these things are subject to possible change. For example, the Labour government has said that if it wins, income tax, National Insurance (NI) and Value Added Tax (VAT), won’t change, and that they will not reintroduce the Lifetime Allowance, although they have stated that they plan, amongst other things, to get the NHS back on its feet, invest more in public services such as policing and education, as well as a new publicly owned, clean British energy company.

So where will the funding for this come from? Ultimately, that could potentially mean that there may be changes to wealth-based taxes such as Capital Gains Tax, Inheritance Tax, pensions and allowances. Or, another possible speculation, may be additional taxation around second homes and investment properties – targeting people who have diversified and have wealth in other areas.

Following a change of government there typically tends to be an emergency budget in the aftermath to set out the budget agenda of the new government and explain to the public how funds will be raised and allocated. Some of these changes may be proposed to come into effect in the following tax year, from April 5^th, 2025, whereas other things may change immediately on the day of the emergency budget.

What could this mean for dentists?

It means they're probably going to continue paying the same level of income tax, NI and VAT (if applicable), but it also means they may have to be more careful about where they build their wealth away from their income and to review any changes thoroughly.

For example, if they're investing in property, they need to be aware of what the taxes and limitations are – a new government could potentially make changes to stamp duty or introduce a capital gains tax regime for second properties, or even a different income tax tier for income from holiday lets. Changes to inheritance tax are another possibility – inheritance tax allowances haven’t changed for a long time – again this is something that could change under a new government. Another example of an area which may be subject to change, are the rules around allowances. If dentists are saving into pensions, they should be aware of what they're contributing each year and what this means against the annual allowance. It also means understanding their current position in the event of a reintroduction of the lifetime allowance. There are all kinds of variations which we could speculate about.

If Labour were to win, one of its flagship policies which could impact dentists with families, is to impose the introduction of the standard rate of 20% VAT on private school fees – at present independent schools do not have to charge VAT on their fees. Removing the current exemption would significantly increase the price for fee paying parents and care providers.

Another consideration which is significant for dentists is the NHS dental service. Preet Kaur Gill, Labour’s Shadow Minister for Primary Care and Public Health stated, “Labour is serious about contract reform. We will fix the immediate crisis in NHS dentistry as well as reform the service in the long term.” This was reiterated during her recent speech at The Dentistry Show at the NEC in Birmingham, where Gill told the audience at the BDA conference that, “the cavalry is coming”.

It will be interesting to see how the proposed reforms would impact NHS dentistry and what this will mean for NHS dentists in terms of working conditions and pay. A YouGov survey carried out on behalf of the BDA, suggests that dentistry is a key issue for voters - 28% identified dentistry as a top local concern, putting it higher than crime (28%) and education (11%). Issues which scored higher were road maintenance (42%), GP services (40%) and affordable housing (36%).

The Labour government has said that it intends to invest in public services, and that certain taxes are not going to change, so therefore we can deduce that these funds will have to come from other areas. The General Election is not far away and things could change significantly - I would say to any dentist, that if you are concerned that there might be an area where you think you would be vulnerable under a change of government, now is the time to understand your current position by talking to your dental specialist financial adviser, this will help to enable you to adapt quickly and make any necessary adjustments in a situation where things change as a result of an emergency budget.

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Please bear in mind that advice in relation to inheritance tax planning is not regulated by the Financial Conduct Authority. Tax treatment depends on your individual circumstances and may be subject to change in future.

For support and guidance on financial planning, speak to a dental Specialist Financial Adviser at Wesleyan Financial Services by booking a no-obligation financial review or by calling 0800 316 3784.

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About: Neil Richardson is a Dental Regional Manager, at Wesleyan Financial Services, guiding a team of dental Specialist Financial Advisers at Wesleyan Financial Services to support dentists, their families, and their practices with financial planning to secure their financial future.

Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority. Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.