Concerns raised over tax changes
The British Dental Association (BDA) has teamed up with the British Medical Association (BMA) and written to the Chancellor of the Exchequer expressing concern at the way changes to Capital Gains Tax could impact on GDPs and GPs.
The joint letter, from Dr Hamish Meldrum, chairman of BMA Council, and Dr Susie Sanderson, chair of the BDA’s Executive Board, is in response to the Pre-Budget Report announcement that taper relief on Capital Gains Tax will be abolished in April 2008.
Taper relief in effect means that sales of assets which have been owned for more than two years are taxed at 10%. The new arrangements would see the introduction of a flat rate of 18% regardless of how long an asset has been owned. In practice this would leave GPs and dentists who own their premises significantly worse off when they sell their property.
The Chancellor has since offered 100% tax relief on the first £100,000 of any capital gain. However, given the significant amount of capital invested in premises, the BMA and BDA still believe the proposals could jeopardise the retirement plans of thousands of their members.
Dr Susie Sanderson said: ‘NHS dentistry relies on dentists investing their own money into practice buildings. This change not only disadvantages those who have made that investment over many years, but could also act as a powerful disincentive to a new generation of potential practice owners. This is a destabilising move at a time when we need more certainty in the system, not less.’
Dr Hamish Meldrum said: ‘Not only is this change extremely unfair on GPs, who over the years have invested heavily in their practices to the benefit of patients, in worst case scenarios it could make it harder for patients to access services. It would be understandable if a practice partner nearing retirement brought forward that date because of this change and the government needs to realise the negative impact it could have on healthcare.’