Today's budget from the new coalition government announced several key implications for dentists. In brief we outline the key aspects that will effect dentists in the coming months and years.
VAT increase to 20% from January 2011
The rise in VAT is not good news for dentists. As a VAT exempt service, dentistry will feel the impact of a rise in VAT of 2.5%. For example a practice spending £10,000 on equipment will face an additional £250 cost. Not good news!
Capital Gains Tax
George Osborne announced with effect from midnight tonight a rise in Capital Gains Tax to 28% from 18% for high rate tax payers. As most dentists we work with are high rate tax payers, this again is not so good news.
However, on a better front the entrepreneur relief (available to business owners) which reduces Capital Gains tax to 10% remains in force but with a rise in value from £2m to £5m! So for the entrepreneurial dentist growing their business, this is good news!
Annual Investment Allowances
The Annual Investment Allowance (AIA) will be reduced to £ 25,000 a year with effect from April 2012. Currently the AIA is £100,000 a year. This means in summary you will be better off bringing forward your Capital Expenditure before 2012, as this will help reduce your tax bills earlier. From 2012 the allowance of £25,000 is a big reduction, and hence will not benefit dentists.
Following on from this the capital allowance rate will fall from 20% to 18% in 2012, again not a good thing for dentists, as the level of capital allowances that can be claimed after the annual allowance has fallen.
Income Tax - Increase of the Personal Allowance
Mainly aimed at low income workers, the personal allowance will rise by £1000 from next tax year. This is good news for low pay workers as they may fall outside of this earnings bracket. The eventual aim of the coalition government is to raise the personal allowance to eventually £10,000. The impact on dentists will be minimal.
Small Company Corporation Tax Rate Reduced
This will be reduced by 1% to 20%, making it more tax beneficial to be running a small company. This in effect makes it a more compelling case for incorporation for certain types of dental practices.
In Summary
Tax rises and cuts were expected. However, this budget is a bit of a triple whammy for dentists, as VAT rises by 2.5% and the capital gains tax rises and the annual investment allowance falls, there is not much good news here for dentists.
The only hint of hope comes in the guise of a 1% drop in small company corporation tax for those dental practices which are already incorporated. If you were considering incorporating, this maybe the final straw for you to take that path.
Tuesday, June 22, 2010
Wednesday, June 9, 2010
The First 3 Practices....Mistakes made
Around 6 years ago The Neem Tree Wandsworth opened its doors to the public. Over the last 6 years we have learned loads about opening practices and for sure, our latest practice is by far our best practice, in my opinion.
Why? Well on several factors, namely costing, look, location and marketing.
Most dentists never go beyond one practice, and quite often many make their mistakes on their first practice, in terms of location selection, equipment provider, budget......One practice is enough for most sensible people. But then again we probably are not that sensible when it comes to opening businesses. As you can probably tell, we quite like opening new practices.
Hindsight is a great tool, and we can see that we made many mistakes in our first Wandsworth practice, when we compare it to our latest Esher offering. Just 3 of the mistakes we made in our first practice include:
Some Key Mistakes We Made
In setting up a dental practice in Esher, we of course made some mistakes, but nothing too major!
1. X-ray Supplier - Our x-ray supplier went AWOL after we gave him a deposit of £2500. We are still awaiting a refund, so if you are reading this blog Mr X-ray, expect some not so nice letters from lawyers to be coming your way soon. Luckily, we, with help of some great suppliers, we managed to get an X-ray system (Durr) installed the morning of opening, just before the first new patient!
2. Flyers - Our strategy of printing a lot of flyers and getting them distributed to local homes although theoretically good, practically is proving to be a problem, mainly because of the quality of the distributors. We know we have a problem when patients are calling us saying they have just had 10 flyers put through their letterbox!! Not a great first impression! Two companies sacked so far, third time lucky!
Over the years we have compiled an invaluable list of people or companies NOT to use. If you want this you will need come on board one of our programmes.
Photos!
Some nice pictures of the new practice can be seen here!
Why? Well on several factors, namely costing, look, location and marketing.
Most dentists never go beyond one practice, and quite often many make their mistakes on their first practice, in terms of location selection, equipment provider, budget......One practice is enough for most sensible people. But then again we probably are not that sensible when it comes to opening businesses. As you can probably tell, we quite like opening new practices.
Hindsight is a great tool, and we can see that we made many mistakes in our first Wandsworth practice, when we compare it to our latest Esher offering. Just 3 of the mistakes we made in our first practice include:
- Being sold way too much equipment by the dental trade. Only buy what you need, not what you may be need. Although our first practice looked great, we were pretty green, and dare I say it over kitted out our first site and hence spent too much.
- Our location, although not bad, near a main railway station, we probably would not choose the same location again. We would probably want a busier location.
- Our team, some of our team from 6 years ago still remain at our Wandsworth site, but we have seen our fair share of nurses, receptionists and dentists. The key learning point from this was the hours of operation. Although, we created hours that worked really well for the patients, for many of the team this was not so good for them - hence them moving on!
- Equipment - This time around we have been much more sparing on our equipment spend and who we bought it from, however, we did have a major issue with x-rays (see below)!
- Location - The location has been a hit - opposite Waitrose has had the desired effect and certainly beaten our expectations in terms of patient bookings (64 new patient registration in just the first 2 weeks!) Daily we are now getting between 1-3 bookings. Although our marketing has been pretty good, if I do say myself, the location and of course the look of the practice has helped significantly.
- Although our hours are long, with Saturday's included, they are much more structured and the team we have in place, including dentists, all appear to be working very well together!
Some Key Mistakes We Made
In setting up a dental practice in Esher, we of course made some mistakes, but nothing too major!
1. X-ray Supplier - Our x-ray supplier went AWOL after we gave him a deposit of £2500. We are still awaiting a refund, so if you are reading this blog Mr X-ray, expect some not so nice letters from lawyers to be coming your way soon. Luckily, we, with help of some great suppliers, we managed to get an X-ray system (Durr) installed the morning of opening, just before the first new patient!
2. Flyers - Our strategy of printing a lot of flyers and getting them distributed to local homes although theoretically good, practically is proving to be a problem, mainly because of the quality of the distributors. We know we have a problem when patients are calling us saying they have just had 10 flyers put through their letterbox!! Not a great first impression! Two companies sacked so far, third time lucky!
Over the years we have compiled an invaluable list of people or companies NOT to use. If you want this you will need come on board one of our programmes.
Photos!
Some nice pictures of the new practice can be seen here!
Tuesday, June 1, 2010
IPAD dentistry
The media is ablaze with them, the whole world wants one, and just about every media outlet is telling us how the IPAD can change our life? Well can it?
I have been lucky enough to be playing with my new IPAD and have been thinking how it could benefit a dental practice. Top suggestions below:
Give it a go
Arun
I have been lucky enough to be playing with my new IPAD and have been thinking how it could benefit a dental practice. Top suggestions below:
- Before and After pictures - will be so easy to show to patients, they will be pretty impressed with the swipe across the screen to show them how they could look! Just the sale of one big case and the IPAD has virtually paid for itself!
- Videos - Show patients videos personally key treatments possible and the outcome
- Play music/video - etc - great for keeping patients and the kids entertained in practice
- Design a patient history form, they then complete it on the IPAD and it is zapped straight into your computer software system
- Be the talk of the town! - ok this won't be forever, but image is everything, so showing to patients you invest in the latest technology will only benefit your practice. Patients know about IPAD's but they have no idea about the latest burrs - so they will assess you on their terms!
Give it a go
Arun
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