The Brexit vote has had an immediate and dramatic effect on the UK’s credit rating and the value of Sterling. The UK is now seen as a less safe place to invest in and less secure to lend money to.

PFM Dental Director, Jon Drysdale, says: “The decision to leave the EU could affect your plans to purchase a dental practice and makes it even more vital to have a robust business plan. Lenders will undoubtedly pass on the increased costs of borrowing although against this it unlikely the Bank of England will impose an interest rate rise.”

The UK remains one of the world’s largest and strongest economies with good banking liquidity, relatively low unemployment and perhaps the potential for improved terms with global export markets. If you subscribe to this view, the cost of borrowing money will probably stabilise and remain at a reasonable rate.

All of this emphasises the need for buyers to examine their business plan and the cost of running a business. Are you being realistic about the interest rate you can achieve? Do your projections stress test for rise in the cost of borrowing?

For more information about PFM Dental services go to: http://pfmdental.co.uk

If you are incorporated as a limited company or incorporation is something you are considering here’s important information about dividend tax changes in April 2016. Changes also apply if you are an associate trading as a limited company.

The majority of earnings are likely to be paid out of the company via dividends. Currently, UK dividends are paid with a notional 10 per cent tax credit; as of April 2016, the dividend tax credit is being scrapped and replaced with a tax-free dividend allowance of £5,000 per year for each shareholder. Additionally, the income tax attributable to dividends is increasing by 7.5 per cent within each income tax band, including the basic rate band – which was previously tax free.

Hayley Hudson ACA, Manager for PFM Townends LLP, says: “There are a number of beneficial reasons to incorporate as part of a tax planning scheme, however, there are many factors to consider. Incorporation should be analysed on a case-by-case basis to ensure it is indeed the best course of action.

“At PFM Townends we always proactively discuss all the advantages and disadvantages with our clients.”

For more information visit www.pfmdental.co.uk

A review of the top five lenders on comparison website Moneysupermarket.com revealed they will not lend to newly self-employed dentists regardless of income. Chartered Financial Planners PFM Dental undertook the review and found that self-employed dentists without at least two years of accounts were barred from obtaining a mortgage.

Jon Drysdale of PFM Dental commented: "We based our review on a first-time buyer wishing to borrow £180,000 for a house purchase of £200,000. The majority of dental associates would easily afford the repayments and they have virtually guaranteed job security. The good news is that specialist dental advisers are aware of lenders happy to accept mortgage applications from newly qualified associates."

Around 1,000 dentists have now completed Foundation Training in the current academic year and the majority will start associate positions during August and September. The move to self-employment usually results in an immediate uplift in income, causing many dentists to think seriously about their first property purchase.

Jon Drysdale is an independent financial adviser for Chartered Financial Planners PFM Dental. He specialises in pension and wealth management advice exclusively for dentists.

For more information visit www.pfmdental.co.uk

The Chancellor of the Exchequer, George Osborne, delivered his Autumn Statement and Spending Review today. There were items of interest to dentists as Jon Drysdale of PFM Dental explains.

Business rates

By the end of this parliament, local government will keep business rates revenue. Elected mayors will, subject to certain conditions, be allowed to raise business rates as the uniform rate is abolished.

Apprenticeship levy

A levy of 0.5% of employers’ wage bill is to be introduced in April 2017 but will affect less than 2% of UK employers.

Pensions

People collecting the new state pension from April 2016 will receive £155.65 per week.

Tax relief on pension contributions could be subject to further change and a decision was expected today but now seems to have been delayed until the Budget next March.

Buy to let and second homes

From 1 April 2016 people purchasing buy to let properties and second homes will pay an extra 3% in stamp duty.

Comment

Jon Drysdale, an independent financial adviser from Chartered Financial planners PFM Dental, says: “After much speculation, prediction and guesswork the Chancellor delivered a fairly benign Autumn Statement. There was little to worry high earners and dentists will be relieved that income tax rates remain unchanged. For once, pensions remain off the agenda, probably in anticipation of the consultation (underway) Osborne announced in the last Budget. This is due to report in 2016 - watch this space.”

For more information visit www.pfmdental.co.uk

Foundation Dentists in the Yorkshire and Humber region will receive free sessions on essential finance and accountancy issues by experts from PFM Dental – the only Chartered Financial Planners offering financial advice exclusively to dentists in addition to a specialist dental accountancy service.

On 28 October at a Dental Foundation Training study day in Sheffield Jon Drysdale (dental independent financial adviser) and Jeff Williamson (dental accountant) will present 'Essential Finance for Dentists part one', providing delegates with everything they need to know about finance and accounting for dentists. Topics include: the NHS pension, income protection, obtaining a mortgage, tax and National Insurance and student loan repayments.

Jon Drysdale, an independent financial adviser for Chartered Financial Planners PFM Dental, says: "We have been speaking to Foundation Dentist groups for more than 10 years and are delighted to have been asked to do so again. In a new format, this time we shall present to multiple groups of delegates – as many at 60 – at the same venue."

‘Essential Finance for Dentists part two' is scheduled for April 2016 and will offer practical advice for Foundation Dentists approaching their first self-employed or salaried post.

PFM Dental will also present free CPD Mini-Lectures on finance matters for dentists at BDIA Showcase at the NEC Birmingham, 22-24 October 2015.

Jon Drysdale specialises in pension and wealth management advice exclusively for dentists. Jeff Williamson is a specialist dental accountant with PFM Townends.

For more information visit www.pfmdental.co.uk

The Chancellor of the Exchequer, George Osborne, delivered his second Budget of 2015 today, 8th July 2015. Following the promises made in the election campaign the main focus was, unsurprisingly, on cuts to welfare spending. Nevertheless, there were items of interest to dentists as Jon Drysdale explains.

Two tax measures will benefit most dentists

First, the higher rate threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17. This will undoubtedly benefit many dentists as the majority are higher rate taxpayers. The amount people will have to earn before they pay tax at 40% will increase from £42,385 in 2015-16 to £43,000 in 2016-17.

Second, the tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in April 2016. The tax-free Personal Allowance – the amount people earn before they have to start paying Income Tax – will increase to £11,000 in 2016-17.

Buy–to-let landlords lose tax break

Many dentists invest in buy-to-let property – a strategy that is already under pressure from decreasing yields. Landlords who currently receive tax relief at 40% and 45% on their costs – including mortgage interest – will be restricted to claiming 20%. This is to be phased in by April 2020 and puts further pressure on buy-to-let yields.

Incorporated dentists: dividend tax rates reformed and corporation tax reduced

The dividend tax credit (which reduces the amount of tax paid on income from shares) will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016. Tax rates on dividend income will be increased and are likely to affect those dentists who take income in the form of dividends. However, Corporation Tax will be cut to 19% in 2017 and 18% in 2020.

Pension reform

A major 'root and branch' reform of pensions was announced with a Green Paper for consultation to be published shortly. The implication is that tax relief on pensions may be reduced and tax-free access to pension pots further eased.

Those dentists with incomes over £150,000pa will be restricted to claiming tax relief on no more than £10,000 of pension contributions. This may make the NHS pension significantly less viable for dentists with this level of income.

Comment

Jon Drysdale, an independent financial adviser from Chartered Financial planners PFM Dental, says: “This budget didn’t contain too many surprises, although dentists who have incorporated will need to consider their remuneration strategy carefully due to dividend tax reform. Landlords were hit with the withdrawal of some tax relief and this may see buy-to-let yields fall significantly.

Jon Drysdale is an independent financial adviser for Chartered Financial Planners PFM Dental. He specialises in pension and wealth management advice exclusively for dentists.

For more information visit www.pfmdental.co.uk