July 9, 2015
Budget Insight from MHA Healthcare Sector
Changes could prompt GP early retirements
Nick Stevenson, Head ofthe Healthcare Sector at MHA, the national association of accountancy and business advisory firms,says that changes unveiled in the Budget could prompt doctors to consider early retirement...potentially exacerbating the shortage of GPs.
On pensions
"From April 2016, the amount that top earners can pay into pensions will be reduced. Those with income above £110,000 will have their annual allowance reduced from £40,000, gradually tapering away to £10,000.
"Many healthcare professionals will be affected by this change, increasing their personal tax liability and adding further complications to an area that is already confusing and potentially making many doctors consider early retirement from the NHS scheme. With a GP shortage already in primary care this may only worsen that position. Doctors should seek early advice over this impact in order to plan accordingly."
On dividend changes
"Fundamental changes will be made to the way dividends are taxed from April 2016, which will affect many business owners who draw their income by way of dividend rather than salary. Many healthcare professionals run a business through a limited company vehicle and this change will directly impact upon the tax liability of these individuals, by way of higher personal tax charges on extraction of profit.
"The chancellor proposes that the first £5,000 of dividends will be tax free, but thereafter, basic rate tax payers will pay income tax at 7.5%, higher rate tax payers will pay 32.5% and additional rate taxpayers will pay 38.1%. No basic rate tax credit will be given.
"There will be a slight tax saving to offset this impact with the reduction in the corporation tax rate, however, this is not starting until a year later, from April 2017.Doctors should seek early advice over this impact in order to understand the implications."
-Ends-
Media enquiries to:
Philip Colley, Harvest PR.
Tel: 023 9244 9655/ 07785 306378 / @harvestprman
Notes to editors:
For more information on the individual firms that form MHA:
About MHA
MHA is a fast growing UK wide association of respected and progressive independent accountants and business advisers, all sharing common values and goals.
Each firm is characterised by its strong reputation in its local area for providing accountancy and business advice to entrepreneurial businesses.
By joining together as part of MHA, member firms can offer clients an increased number of specialist accountancy services and expert business advice. As well as benefiting from the in-depth sector knowledge available across the association.
MHA is an independent member of Baker Tilly International.
Baker Tilly International is the world's 8thlargest accountancy and business advisory network by combined fee income of its independent members. Baker Tilly International member firms specialise in providing accountancy and business advisory services to entrepreneurial, growing businesses and mid-market listed corporates worldwide.