Changes unveiled in the budget could prompt doctors to consider early retirement, according to a leading accountant specialising in healthcare businesses.

From April 2016, the amount that top earners can pay into pensions will be reduced. Those with income above £110,000 will have their annual allowance reduced from £40,000, gradually tapering away to £10,000.

Sarah Curzon, tax director with Broomfield & Alexander, which has a base in Newport, said many healthcare professionals would be affected by the change.

“The new arrangement will increase their personal tax liability and add further complications to an area that is already confusing, potentially making many doctors consider early retirement from the NHS scheme,” she said.

“With a GP shortage already in primary care this may only worsen that position. Doctors should seek early advice over this impact in order to plan accordingly.”

She also advised doctors to take advice sooner rather than later on the implications of dividend changes announced by the Chancellor.

“Fundamental changes will be made to the way dividends are taxed from April 2016, which will affect many business owners who draw their income by way of dividend rather than salary. Many healthcare professionals run a business through a limited company vehicle and this change will directly impact upon the tax liability of these individuals, by way of higher personal tax charges on extraction of profit,” she said.

“The chancellor proposes that the first £5,000 of dividends will be tax free, but thereafter, basic rate tax payers will pay income tax at 7.5 per cent, higher rate tax payers will pay 32.5 per cent and additional rate taxpayers will pay 38.1 per cent. No basic rate tax credit will be given.

“There will be a slight tax saving to offset this impact with the reduction in the corporation tax rate, however, this is not starting until a year later, from April 2017.Doctors should seek early advice over this impact in order to understand the implications.”

Another potential blow for healthcare professionals comes from the withdrawal of corporation tax relief for business goodwill amortisation.

“Anyone who runs a pharmacy, for example, via a limited company and is looking to acquire new pharmacies would traditionally do this via an acquisition of goodwill in order to benefit from the corporation tax relief on the amortisation,” said Sarah.

“This relief is often a key factor in determining the sale price for such acquisitions. Anyone looking to buy or sell in the healthcare sector now should take advice on how to structure such a sale.”