Updated February 2026

Most Doctors accounting through a limited company will have paid their Corporation Tax bills at the end of December and self-employed Doctors their balancing tax together with the first tax payment on account at the end of January. In nearly all cases, the tax due is likely to be significantly more than previous years.

The following article has even greater relevance than when first published and certainly worth a read to find out how buying new equipment on finance could reduce your next tax bill.

If you’re a Doctor and would like to discuss further, call the author Mike Shaw on 07775 925925.

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First Published January 2024 – Rates Unchanged for 2025/26 Tax Year

We’re all paying more tax this year than ever before, so it makes sense to use whatever legitimate government incentives you can to keep the tax liability down for your professional practice.

Thinking of acquiring new dental technology, equipment or machinery?  

We have some key advice to help you make tax savings.

The first step is to understand the rates you’re going to pay, and the tax traps where some considered investment in new equipment could save a significant amount.

Tax Rates Explained for Doctors – By Employment Status

Self-employed

Income tax for self-employed businesses with profits above £100K shot up in 2023/24. The starting point for the 45% tax rate is now only £125K, so you don’t have to make fortunes to lose nearly half of everything you earn.

Worse still, on taxable income between £100K and £125K, the effective rate is now a staggering 60%. The government’s measure of withdrawing the basic personal allowance for those earning above £100K has left many paying significantly more tax than they expected.

Companies

If you account through a company for your practice, a similar arrangement exists.  When the company makes more than £50K pre tax profit, the £0 to £50K band at 19% is phased out and the effective tax rate between £50K and £250K is actually 26.5%. This, by any standards is a massive increase over previous years and a tax trap you probably want to avoid.

How to Reduce Your Next Tax Bill

“The key to saving tax is not necessarily to earn less, but to reduce the income you pay tax on”. What better way to do this than by investing in new equipment, qualifying for the Annual Investment Allowance, now a permanent government scheme allowing with a very generous limit of £1M.

You’ll have the added benefit of keeping up to date with the latest treatments need to grow your patient list.

This investment is where we can help.

You Don’t Need to Use Cash

The right type of finance agreement will enable you to reshape your tax calculation and leave more money in the bank for better things.

Example – Self-employed Doctor

Let’s look at a self-employed doctor for the tax year to April 2024, before and after investing in new equipment:

Before Investing

Pre Tax Profit                                  £125,000

Income on which tax is due            £125,000

Tax Due                                           £47,460

Profit after Tax                                  £77,540

After Investing

Pre Tax Profit                                 £125,000

Investment in Equipment               £50,000

Income on which tax is due            £75,000

Tax Due                                         £17,432

Profit after Tax                               £107,568

Covering Your Finance Payments From the Tax Saving

In this case, the tax saving of £30K would pay for nearly two years of finance payments, (assuming a 60 month term). What’s more, during this time the new equipment will have improved efficiency and made the practice more rewarding.

Annual Investment Allowance

Now a permanent measure, the AIA enables nearly all businesses to offset the full capital cost of equipment and machinery against their profits. Read more at Annual Investment Allowance 2025/26

Act Now

Key points to remember:

• We can help you lower your taxable income, when you invest in dental or medical equipment

• The right type of finance will ensure you have the cash in hand you need for practice growth

• The equipment needs to be delivered and the finance agreement activated before the end of your tax year (self-employed and companies).

If you’re concerned at how much tax you’re paying this year, then you need to Act Now before it’s too late for 2025/26.

The purpose of this article is simply to draw attention to the tax traps and the potential savings available by financing new equipment. We recommend you speak with your accountant or professional tax advisor to see how any such investment would apply to your own tax calculation.

For further information please call Mike Shaw on 03300 580151 or 07775 925925 or email us at info@telelease.com