The Chancellor has announced in the budget a reform of how tax relief on pension works, which will help dentists. It makes it far less likely that dentists working in the NHS will face additional tax charges.
Since 2016/17, some higher earning dentists have faced very high tax charges because of a restriction on tax relief for pension contributions. Once your income exceeds £110,000, you are potentially subject to additional tax because of the increase in the value of your pension during the tax year.
In a welcome move, the budget for 2020/21 increases the tapered allowance threshold for pensions tax relief to £200,000. As long as your income excluding pension contributions is under £200,00, then you won’t face any extra tax charges.
This means that an individual dentist is very unlikely to be caught by this threshold and won’t face the very high tax rates they may have in the past. However, if you work in the NHS there may be some variations on this which are explained here.
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