The Dental Business Guide

What Rachel Reeves’ Autumn Budget Means For Small Healthcare Businesses

• Samera Business Advisors

Share episode

A budget leak, a flat delivery, and yet a sharper squeeze on business owners than headlines suggest. We break down how Rachel Reeves’ autumn budget quietly raises the tax take from dentists and small healthcare businesses through frozen thresholds, dividend increases from 2026, reduced capital allowances, and new national insurance on pension salary sacrifice above £2,000 a year.

We walk through the real‑world impact on profit extraction, investment timing, and cash flow, explaining why fiscal drag nudges more income into higher bands even when you feel like you are standing still. You’ll hear a clear plan to stress‑test salary versus dividend blends, bring forward essential equipment buys, and model pension contributions under the new NI rules. We also unpack the extra two percentage points on rental and investment income and what that means for clinicians with property portfolios or savings, alongside the looming reality of Making Tax Digital and quarterly submissions for those earning over £50k.

Beyond the tax rules, we get practical: targeted price adjustments, operational efficiency, and exploring offshore admin support to reduce payroll pressure without sacrificing patient experience. The tone is honest and pragmatic—no scare tactics, just straight guidance on protecting margins and planning across multiple years. If you run a dental or healthcare practice and want a calm, actionable way to adapt, this conversation will help you map the next steps with confidence.

If this was useful, follow the show, share it with a colleague who needs clarity on the budget, and leave a review to tell us what you’re changing in your 12‑month plan.

If you require any help, don't hesitate to reach out to the Samera team at www.samera.co.uk. We are all here to help you!

Thank you,

The Samera Team

SPEAKER_00:

Okay, good evening everybody. Um Arun here and lovely to um meet you here this evening on a cold winter's November evening. Um now excuse me, I've got a bit of a cold, so I'm just trying to recover from that. But today I'm gonna be talking about the budget that was announced today uh by our friend Rachel Reeves. I'll keep this relatively swift, okay, maybe for 20 minutes, um, and just run through some of the key points that came through the budget. Um I don't know if people were aware, they saw the news, but the actual budget was released in advance by mistake by the Office of Budget and Responsibility, but budgetary responsibility on their website, and I don't think Rachel Reese was too pleased by that. Maybe it was politically motivated, that release, who knows? Okay, but that's what's happened, that's what happened. So a lot of the stuff that she talked about at 12:30 was actually on other websites earlier on, but anyway, that's the past. We need to look towards the future, and we need to understand okay, how does that impact um businesses, business owners, um, our clients, and um the impact on what you may be able to do. Now, in summary, my kind of gut feel and honest opinion is that it could have been a hell of a lot worse. Um, it's not great, okay, but it could have been worse. I think that's the key message from this. Um, there could have been income tax rises, there could have been further wealth, exit wealth taxes, there could have been a whole range of things, okay? Um, further issues on pensions. Um, so but in saying that, it was a bit of a mwah meh budget. Nothing, nothing there was so much so much of a build-up to it, and then the output was pretty kind of pretty unexciting, to be honest with you. Um, at least so now, how does that impact? So, let me let me go through some a few slides I've put together and then we can run through it. So, um, for those of you of us new to to any webinars that we do, um, as you may know, may not know, my name's Aaron. Um, perhaps that's a little bit younger when I was looking a few years ago, better haircut, but uh um I'm the owner and CEO of Samaria, um, chartered accountants for pretty much dentists and other healthcare professionals across the UK. Um, I'm also the owner and CEO of Samara Global, where we provide uh manpower from overseas to support businesses. Um we also are um owner of the co-owner of the Dean Tree Dental Group, based in Surrey in London. And um, kind of my experience has been significant in the dental sector, working with dentists of all shapes and sizes, associates, all the way to practice owners, and everyone in between. Um, we help with accounting, tax, financing, funding for purchases, due diligence, tax accounting, name. Okay, anyway, that's enough about me. I'm a train charged accountant with PWC. Um, but for the last 24 years, I think it's 24 years, I've been working with dentists. So um, and I've all and that's all and that's all to I can blame my wife for that because I married a dentist. It's me, Tom. So, budget. Um, excuse me. Now, the autumn budget um ultimately was delivered against the backdrop of weak productivity and higher borrowing costs. Um for small business owners, it's mixed news, as I mentioned. There's a little bit of support, but ultimately there's significant tax increases, which will affect the take-home pay, any investment or savings income that you have, and ultimately operational costs. So, overall, it's a heavier tax environment for SMEs, for dentists, for owner-managed businesses. There's no getting away from that. That's the bottom line. Um, and I think in this with this current label government government, with subsequent budgets, I can't see it improving. Um, it may stay the same, but it may even get worse over the next few years. So, my gus is telling me they'll make these changes, but uh I don't think the government, the the public will be too pleased with them. Um, I don't think businesses are overly pleased with the budget. I don't think it's as bad as it could have been. Um, so that's why the stock market rose today. But um, I think that the the Labour government are probably signing their death death warrant, I think, for certainly from a business perspective. So, what are the changes? Right, from April 2026, um, dividend tax rates are going up. So, if you are paying yourself a dividend um from your limited company, the basic rate dividend basic rate dividend tax increases to 10.75, high rate to 35.75, and the additional rate to 41.35. The allowance of 500 remains, 500 pounds remains, and bottom line, this reduces the efficiency of the salary and dividend model, which is quite often used by our clients in extracting money. Directors extracting higher dividends will see reduced net income. So dividend tax in a nutshell gone up by 2% from 26, 19, April 26th. Not great. Um, the other big issue, which seems to be just which is called fiscal drag in a nutshell, is that personal allowances are ultimately frozen for tax purposes. So, what that means is that if salaries are going up or your earnings are going up, um the tax bans still stay the same. So if your salaries is risen at a higher rate, the actual tax banners is still stayed the same. So you are then taxed ultimately higher, more tax more money goes to tax. Um so this pushes more higher earners pushed into more earners are pushed into the higher tax break bracket as your earnings increase. Um, so you effectively you get less money. Uh if they were pushing up the fist, if they were pushing up the tax brackets higher, then obviously that goes in line. So the the the the the bottom line here is you're going to be paying more tax. NI thresholds are frozen um again, again, increasing national insurance paid over time. So, again, this whole model of um trying to save tax by having uh a lower salary and dividends um isn't so great. And in addition, this does impact employees, impact employees too, because um if their salaries are going up but the thresholds are still lower, they'll be paying more tax as well. So, another negative point for any kind of earn high earners or even any earners out there is this is how she's getting more tax from us. Corporation tax that's remained the same at 25%, which is fine, but capital allowance is reduced, meaning lower upfront tax relief on equipment, machinery, and qualified assets. So you might want to start thinking about when you're gonna um invest in equipment. It may be better to start investing in that earlier rather than later. Um impacts things like healthcare businesses, dentists, doctors, clinics, all these equipment-heavy sectors. So you need to review when the dates are and also then look about when you're gonna be spending money. That's gonna be really important as well. Um, the other big note to again highlighted in this uh uh budget was from April 29th. So it's still a number of years away. Um, and I think that's one of the points that I picked up on. A lot of these things aren't happening immediately, some are, but a lot are happening in two, three years down the line. It's all kind of factored in, and they're all they're all and she's and I think Rachel Reese was very positive. Oh, our forecasts are going to be very accurate based on all this information, everything's happening. But what I've learned from experience is that these forecasts are rarely um accurate, they rarely meet the targets. Um, but anyway, on the pension side of things, a salary sacrifice pension contribution, anything over 2,000 per year will attract employer and employer national insurance. So currently, salary sacrifice avoids national insurance entirely, um, which has been very effective for business owners. Now, this change removes much of the NI advantage on higher contributions. Small business owners using pensions to extract value tax efficiently will face higher NI costs, and employers offering enhanced pensions will also face increased national insurance liability. So, in a nutshell, she's coming after us with our pension contribution. So anything over 2,000 a year will attract employer and employee NI. Um, not great. So far, so negative. Um, other taxes additional still not good. Um, things on savings. Um, if you're a landlord, if all these other things, you'll get taxed. Another two percent, two percentage points on rental income will be taxed. Um, other investment income will be taxed by two percent. Um other diversity income, properties or investment, you'll get two percent taxed on that, too, an additional two percent tax. Um, and this is all on top of all the taxes we've talked about in the dividend tax increases and the tax fiscal, uh, the tax rationals we've discussed already as well. Um, what does this mean? What does this actually mean? Well, you've got higher taxes, reduced allowances, therefore, the complexity of salary, dividend, pension planning increases requiring more detailed financial advice. Yes, I that's more. That means you're gonna need to talk to people like myself, perhaps more. This means um, and that accountants will have to help help navigate this better. Um, many kind of analysts are warning that the budget reduces incentives for small business growth and formation and growth, um, and more planning is required to optimize tax efficiency across all income types. Now, in my view, I think um that it was inevitable that what we're gonna get taxes were gonna rise. She hasn't increased the rate of VAT, she hasn't increased the rate of income tax, but she's done all these other sneaky little tricks to grab more tax. So, what does that actually mean for you as a as a as a business owner? What can you do? Well, I don't think you should be booking your flight to Dubai or to Monaco or to Italy or to wherever it may be, that may be sunnier climb if you want to be part of the UK um establishment and part of the UK um kind of environment. Um, but the inevitable is that they need to raise tax, and we as maybe business owners or maybe higher rate earn higher eight earners will be penalised and taxed for that. Now, does that discourage investment? Does that discourage um entrepreneurship? Maybe for some people what milk may do, but in my view, ultimately, you just got to keep going forward and keep pushing forward in this whole situation and seek out the best advice possible for your business. Now, there have been um some support measures implemented and kind of highlighted. There's some support for which which will be around regional growth incentives and selective investment schemes. What they mean, I I there's nothing more detailed now at the moment. Um, but I don't think any of those will really offset the increased tax burden for SMEs. Um be free apprenticeship funding for SMEs. That sounds very attractive. Um, so if you're trying to hire young T P T people under 25 um to come on to apprenticeships, they're saying it's free. Um, I think the devil will be in the detail, and it's quite an attractive thing if you're a business trying to look for younger staff members and looking to develop staff members, and that's something that I myself will be investigating for my own businesses um to see what can what what are the benefits and what are the advantages there for us, too. Um, so that's a an opportunity there, but apart from that, not a great deal. Um, so what are the what's the net impact of all of these things? Um profit extraction via dividends becomes less tax efficient, bottom line. So if you've got a limited company, taking more money out via dividends is definitely less tax efficient now. Um, but if you've got a company, there's probably not any other way to do it. You're not really going to dissolve the company. Um it's not really the right things to do. Um, there'll be reduced capital allowances on items you purchase for clinics, such as chairs, scanners, IT upgrades. Um, pension-based extraction strategies lose attractions due to the national insurance charges. Um, owners with rental or savings income face additional taxation. Um so all of these things compound, and really what you need to start thinking about is cash flow planning becomes a lot more essential due to combined tax pressures. So there's all the taxes and further national insurance um income tax, the fiscal drag. Um, and ultimately people like dentists, doctors, legal accountants are all going to be affected by this. And I'm I was just looking at my own firm, I look at my wife's business. There's no doubt we'll be affected by this. Now, how do we um minimize the impact? Um, good question. Um now, the danger is that you put your prices up and that's inflationary, then that could have an impact on demand. Um, and the government doesn't want it to be inflationary because if you put the prices up, they might have to raise interest rates to bring inflation down again. So I hope they know what they're doing. To me, I don't think they do know what they're doing. That's my own personal opinion. Um, and I think one of the really key points here is that I listened to the budget, the whole budget today, and then I heard Kemi Vader not briefly afterwards. I didn't listen to the whole thing of hers. And it didn't, none of this actually inspired me. Okay. How you're supposed to how are they supposed to inspire business? How they're speculating, they're not inspiring anyone to go for it to invest to in into the UK economy. They say they want UK to be the best business environment in the world, they want to attract investment from all over the world, but yet they've raised these taxes and they haven't really inspired me as a business owner. I'm just an average business owner here in the UK, and I'm sure many, many other people feel similarly. So um let's see what happens, okay, um, over the next year or two. Um, but what can we do? We have to suck it up and see. Um, we have to seek out the best advice, and we have to keep going, we have to keep pushing, we have to keep trying, we have to keep um keep the hustle alive, as they say. Um, so I strongly um suggest not to get down by all of this, okay? It's an inevitability. Taxes, as they say, and death are the inevitabilities of life. Um, and this is just a further uh reminder of this today's budget. So just to put the nail in the coffin for anyone who's wealthy enough and has big houses and or is aspiring to own a big house, um, they're saying from 2028 there'll be a further tax, a mansion tax ultimately on houses worth more than two million pounds. And if you owe houses, if you're lucky enough to have a house that's over five million, that's going to be about 7,500 pounds on top of your existing council tax. So it may not impact you, but um it just seems to be penalizing. This budget seems to be penalizing for people who have aspirations, who want to grow and who want to develop. And um, people may think, well, why do I want to buy a two million pound house now or five million pounds? I'll just stick with something smaller. Um, I don't know. Okay, it's just these these this this is the vibe I got, and I understand that she wants to fund the government and improve schooling at the NHS. I get that personally, I think that's a great idea, uh, and that's needed. Um, but there are other ways to do that, and that that other way is to encourage investment, encourage business. And to me, there was no encouragement in this budget to encourage um the business owners out there. So, key takeaways. Um, I did say it's gonna be about 20 minutes, I'm almost there. Um, review your salary, dividend, and pension extraction strategies with an accountant. Um, if you don't have an accountant, maybe reach out to me or my team. Um, consider bringing forward equipment or refurbished investments where possible. Update your forecast to include higher dividends, savings, and rental tax rates. Prepare for fiscal drag as thresholds are now frozen until 2031. Um, ultimately budget for increased compliance and advisory costs. Yes, that's me. My costs, accounts' costs, um, advisors' costs. And really ultimately take a multi-year planning approach to optimize tax efficiency under the new rule. Don't just look at it in isolation in one year. Don't look at it and say, Oh my god, it's too high. I need to do some. Don't be rash, okay? Just think through all the options, talk to all the right people. Um, we work with a lot of clients, and if we don't have the expertise in-house, we can bring in other experts into the arena who might have a very specialist um expertise on a particular domain. So we can certainly help there as well. Just to compound this further, just to make the put the nail in the coffin, which I'm sure you don't really want to hear. Um, making tax digital is coming in April next year, and that's another burden for anyone who's earning over 50k. Um, you'll need to you'll need to be making quarterly submissions with digital software, um, plus one annual submission too. So, no, no longer one annual return, effectively five annual returns. Um, again, if you need help, we can certainly help you. This is what we're doing. We're signing up people to this now, um, getting people organized and ready for that when it kicks off in April next year. Um, so tax, tax, tax, tax seems to be the common theme across the base, across this all. So now you might be depressed. Please don't be depressed. Um, life's not that not that bad. We need to keep moving forward. But if you need a new accountant in this space, we deal with um 99.9% of our clients are dentists, and if they're not a dentist, they might be a pharmacist or a doc pharmacist or a doctor. Um, we're taking on around 10 new clients a month. Um, and who are and we are specialists in this accounting and tech space. We deal with everything from associates to multi-practice owners. And one thing we're very, very proud of is that we're very tech driven. We use technology to try and automate things as much as possible, keep costs lower, and of course, we're pretty damn tax savvy as well. Okay, as well. Um, if you need any help, um, best bets to go to our website. Um, there's tons of information there. Book a call with myself or perhaps my colleague Natasha. Um uh and there's a for a free kind of Calendly link on there, and you can book a call with us just to discuss your particular needs. Um, and I suppose increasingly um we know it's a tough tax environment, but and my last phrase here is focus on what you can control. Okay, um, you aren't gonna be able to control what Rachel Reeves says, you aren't gonna be able to control what the tax rates are, you aren't gonna control what HMRC is gonna demand from you. You can only focus on what you can control. That firstly starts with your mindset, um, secondly, the work that you do, um, the the effort you put in, the strategies you put into place in your business, and if you focus on that, um, and taxes and inevitability, we're gonna have to pay that anyway. But we can help you with all the accounting, finance, tax, and all the strategies that you need to kind of grow your business. So, my view my my take from this whole budget is honestly, I'm double downing on everything in my business, in my wife's businesses, on my Sumera side, the financing side, we're double downing on everything. Um, if they're gonna take tax, they're gonna, I'm gonna have to make more money, bottom line. And that's kind of the game plan. Um, one of the areas that we're also working with clients now, and I had another inquiry today, is that I think as costs are rising, people are looking at other business models. Um we have people talking to us now about saying, well, actually, can you provide manpower to um answer phones or deal with WhatsApp messages or calls or emails overseas? And that's what we're providing now. We provide manpower overseas. Um, there'll be no national insurance, no employers' tax, or employee tax, employers um tax, none of that stuff. And it'll be significantly lower rates as well, whilst also attracting good quality talent as well. So that's another area that we can help with on our whole offshore team. We're even helping clients set up their own own offshore operations as well. So, all in all, um, we are here, we're not going anywhere, we've been here for 24 years. I think we'll be here for another 24 years. No one's going to kick me out of the country. I'm quite happy here in the UK, despite having to pay a hell of a lot more tax. Uh, my children might be unhappy um when they have to pay my inheritance tax bill at some, but their inheritance tax bill rather at some point in the future, unless I plan it right. Um, but uh if anyone needs any help or if you've got any questions, please do fire them away now. Um, alternatively, do reach out to us um on the on the on the on the on the uh kind of through a kalendi on our website and we'll be there to help you further. Okay, thank you very much. Um I hope I didn't depress your evening too much. I'm gonna go and have some dinner, and uh I hope everybody has a lovely evening and um makes the most of what the life has often has to offer. Thanks very much. Good evening.