GP And Dentists' Leaders Express Concern Over Tax Changes, UK

Main Category: Dentistry
Also Included In: Primary Care / General Practice
Article Date: 24 Dec 2007 - 0:00 PDT

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The British Medical Association (BMA) and the British Dental Association (BDA) have written to the Chancellor of the Exchequer expressing concern at the way changes to Capital Gains Tax could impact on GPs and GDPs (General Dental Practitioners).

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 had 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."

Note:

The full text of the letter is as follows:

Dear Chancellor 16 November 2007

Autumn Pre-Budget Report - Capital Gains Tax

As organisations representing professionals in healthcare in the UK, we wanted to write to express our concern at the proposal to end Capital Gains Tax Taper Relief from April 2008, as announced in your Pre-Budget Report.

Many of our respective members have invested, over many years, significant sums in premises from which to serve their patients. Abolition of taper relief would dramatically reduce the net value of these long-term investments, making similar investment in the future less attractive. This would have particular implications for those practice owners who, having carefully planned their retirement, would be hit by a measure whose impact would be retrospective in practical terms. In worst case scenarios, it could restrict patents' ability to access these services, particularly if practice premises owners decided to bring forward retirements to before April 2008.

In summary, we urge you to reconsider the proposal, as it will affect a very broad range of professionals in healthcare and potentially impact patient access.

We would also appreciate a meeting with you to articulate our more specific concerns and explore possible solutions.

In view of his interest in the issue and the possible adverse impact of the delivery of healthcare services, we have copied this letter to the Rt Hon Alan Johnson, Secretary of State for Health.

http://www.bda.org.uk