Teresa May’s shock decision to announce a general election has proved beneficial for doctors facing increased digital tax reporting and lower dividend payments from their limited companies.
Several controversial revenue-raising plans announced by the government in recent months were removed from the Finance Bill in order to get it approved by parliament ahead of the election. This includes delaying the proposed reduction of the new dividend tax allowance which would force doctors running their business as a limited company to pay more tax.
From 2018, the dividend allowance was to be cut from £5,000 to £2,000. This would have also impacted doctors who hold shares in portfolios outside of ISAs or pensions.
Plans to introduce quarterly digital tax reporting under the government’s Making Tax Digital scheme were also left out of the Finance Bill. It has been suggested there would not be sufficient time before the election for parliament to scrutinise the full details of the scheme which has proved unpopular with businesses and the accountancy profession.
There have been several political U-turns recently which have brought some welcome relief for doctors facing constant financial pressures, including the decision to remove increased national insurance payments for the self-employed.
However, these plans have been delayed, not necessarily removed all together. It is wise to ensure your own finances are in the best possible position to be able to face whatever announcement comes next – no matter what the outcome of the election.
For more information, please contact one of our advisers on 020 7636 7006.