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Go shopping now, dentists urged
28th Feb 2011
As the general trend for ‘tightening one's belt' continues in the UK's current climate of economic uncertainty, there is some good news that may encourage dental practitioners to purchase certain items outstanding on their surgery shopping lists.
Accountant Matthew Watson, at Ballard Dale Syree Watson, provides services to a range of clients in the healthcare sector, including many dental practices.
He suggests it may be a good time to remind dentists and dental technicians to consider making any major capital expenditure before April 2012.
The annual investment allowance (AIA) allows most businesses to gain tax relief for their annual capital expenditure, with the current maximum amount being £100,000 per annum.
This allowance will be reduced to £25,000 with effect from April 2012, a huge reduction and loss of potential relief for businesses with large capital outlays after this date.
With items such as wall-mounted X-rays, dental chairs, sterilisers, dental cabinetry and modern equipment technology, £100,000 can soon be spent on necessary capital purchases so it makes sense for dentists to consider making these purchases before April next year.
Matthew says: 'This is such a large reduction in tax relief that perhaps now is a good time to remind dental practitioners everywhere, that if they are looking to replace or update certain capital items it makes more sense to consider purchasing those items before April 2012. I would suggest that an initial review of a practice's assets is a good starting point.
'This allowance means that you receive tax relief now rather than later. If you spent £50,000 on equipment pre April 2012 and are a 40% tax payer you will save £20,000 in tax relief. If you leave it until after April 2012 you would receive tax relief of £10,000 in the first year, £2,500 in the second year, £1,875 in the third year and decreasing savings over subsequent years. In fact it would take over 10 years to achieve a similar tax saving achieved in one year under the 100% annual investment allowance. This is certainly a valuable relief.'
For further information, contact Matthew Watson on 01905 794504 or email
matthew.watson@ballardsca.com.
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