Practice investment, including in cosmetic dentistry equipment, is helping to drive increased income in the biggest businesses in the sector, according to new research.
LDF, which specialises in loan and asset finance solutions, published a blog on 30 March reporting that the UK’s 100 biggest dentistry businesses recorded a turnover of £945 million in 2014, up by 22 per cent on 2010 and by five per cent in the last year.
The report said that that increased demand for a range of cosmetic procedures, many of which require specialist equipment, had contributed significantly to growth. It also highlighted the expansion of private equity-backed dental groups, some operating hundreds of practices, which had undergone significant investment since joining the groups.
LDF managing director Peter Alderson said: “Many independent dentists could benefit from continued capital investment in their practices, as more UK consumers show they are willing to pay for more advanced cosmetic procedures, private clinic style environments and enhanced services such as online booking and text message reminders.”
There is currently some uncertainty over future levels of the annual investment allowance (AIA), which was increased in the 2014 Budget to £500,000 until the end of 2015. The allowance – which enables dental practices and businesses to invest in plant and machinery and deduct the cost from taxable profits – had previously been increased from £25,000 to £250,000 for a two-year period starting on 1 January 2013.
In the March 2015 Budget, Chancellor George Osborne said that the Autumn Statement – usually in December – would be a better time to address future levels of the AIA.
Dental practices thinking about major capital investments now have a limited time to act to take advantage of the higher AIA limit, ahead of a potential reduction later this year. Milsted Langdon can provide expert advice on maximising the tax efficiency of capital investments as well as assisting with raising finance. For more information, please contact us.