CATHY TEW ASSOCIATES CHARTERED TAX ADVISERS & ACCOUNTANTS TO SMALL BUSINESSES WITHIN THE MEDICAL & DENTAL PROFESSIONS

Transcription

1 CATHY TEW ASSOCIATES CHARTERED TAX ADVISERS & ACCOUNTANTS TO SMALL BUSINESSES WITHIN THE MEDICAL & DENTAL PROFESSIONS F I N A N C E & T A X I S S U E S F O R N E W L Y Q U A L I F I E D G P S 2 2 M A Y

2 HOW MUCH WILL I EARN? Salaried - 50,000-85,000 Average 58,000 Average per session 7,250, seems to be reducing in recent months Locum - 60,000-95,000 Average 70,000, depends on flexibility. rate in Sheffield 75 PH Leeds PH Principal (Partner in a Practice) - 60, ,000 Average 85,000, this is reducing by the DAY! Generally full time in this region is 7/8 sessions per week, in other areas this is 9/10 sessions.

3 SALARIED GPs Tax relief for professional subscriptions; what will the Practice pay for? PROFESSIONAL INDEMNITY-Dependent upon the level of income, the Practice generally pays for the premiums to the MDU/MPS. The trend in the last two years though has been for the GP to pay their own contribution. OTHER SUBSCRIPTIONS in 9/10 cases are paid for by the Doctor personally i.e. GMC, RCGP, FFP,CCT,BMA A letter to the local tax office requesting relief to be included in the code number will permit earlier tax relief Mileage work related First 10,000 miles 45P Over 10,000 miles 25P If the Practice does not pay mileage costs, a claim can be made to the local tax office. But be aware the Inspector will ask you to justify your work related car journeys.

4 LOCUM GPs TAX & NATIONAL INSURANCE- Self Employed Register with tax office/on line ASAP, the 3 month rule no longer applies. Complete forms CWF1 & CA5601. LOW SELF EMPLOYED EARNINGS (SEE) Certificate CF10 LESS THAN 5,725 (2013/14) START PAYING CLASS 2 NATIONAL INSURANCE 2.70 per week direct debit, every 6 months or monthly START SAVING FOR TAX FROM DAY ONE 40% of gross income REPAYING STUDENT LOAN with first instalment of tax, complex calculation, exemption 15,795 applicable RETAIN ALL PAPERWORK FROM DAY ONE- Cathy's plastic envelope approach or the spreadsheet and retain records for 6 years- CHECK OUT THE LOCUM ORGANISER PROGRAM USE a separate bank account It's important that you keep your business and personal records separate, so that you can work out exactly what relates to your business, not necessarily a business account

5 Where are the Locum Jobs? How to get a Locum Job the Practice Local Locum Group Course Organiser /FRIENDS Negotiating Fees Locum Group guidance - 75 per hour- Sheffield Locum rates, higher in other areas How to get on the performers/supplementary list? Register with the PCT SUPERANNUATION LOCUM FORMS A and B- new forms from APRIL 2013.

6 HIGHS & LOWS OF BEING A LOCUM Flexible working Your own boss & Liberating Good chance to grow as an Independent Doctor Great chance to explore surgeries and see different ways of working Good and bad Practice Fantastic opportunity to ascertain where you may like to work longer term Opportunity to see NON training Practice YOU MUST BUDGET for the fact that as a Locum you do not receive any SICK/MATERNITY/PATERNITY PAY/ANNUAL LEAVEfemales entitled to maternity allowance which is non taxable, need to have registered for self employment and be paying the class 2 national insurance charge. YOU MUST SUBMIT ACCOUNTS TO HMRC

7 PRINCIPAL GPs WHICH PRACTICE? Deprived/affluent Rural/urban Dispensing/non dispensing WORKING CAPITAL Buy in or build up? - pay a lump sum SURGERY To buy or not to buy? Notional Rent

8 PRINCIPAL GP & LOCUM GP- When do I pay the Tax? Dr Best commenced in Practice on 1 August 2013 and the year end is 31 MARCH (shortened period) TAX YEAR /14 Profit Assessed to TAX PAYABLE all tax for 2013/14 (8 Months Profit) TAX YEAR /2015 Profits Assessed 12 months to 31 March 2015 TAX PAYABLE Half 2014/15 Tax Half 2014/15 Tax Balance of 2014/15 Tax, assuming Tax for 2014/15 is higher than 2013/14 TAX YEAR /2016 Profits Assessed 12 months to 31 March 2016 TAX PAYABLE Half 2015/16 Tax Half 2015/16 Tax Balance of 2015/16 Tax, assuming Tax for 2015/16 is higher than 2014/15 IN ADDITION THE JANUARY PAYMENT WILL INCLUDE THE REPAYMENT OF STUDENT LOAN STUDENT LOAN PAYMENT ALWAYS ADDED TO JANUARY PAYMENT.

9 LOCUMS/PRINCIPALS TAX CLAIMS WHAT INFORMATION TO RETAIN CARS- restriction CO2 Emissions level see separate help sheet Fuel Servicing / repairs / MOT Insurance / road tax Loan / HP interest / car hire Claimable miles - mileage log- WATCH MUST BE GENUINE BUSINESS MILEAGE Telephone / mobile / internet Professional subscriptions Textbooks- but not for examinations / journals / courses Accountant s fees Tax investigation insurance- HMRC target certain sectors Dry cleaning Equipment- Bag Computer /IPAD Use of house specific claim one room used solely as an office - claim proportion of household expenses - general claim FT locum 5-10 per week

10 NHS Pension Scheme CONTRIBUTION RATES- WEF April 2013 up to 15, % 15, to 21, % 21, to 26, % 26, to 48, % 48, to 69, % 69, to 110, % 110, and over 13.3% * NB - These are full time equivalent figures so if, for example, you are working half time earning say 60,000 you would still fall into the 11.3% contribution band. COMPLETE LOCUM A & B for LOCUM GP see attached- by 7 th of the following month- maximum 10 weeks after performing the work Salaried GPs also have to complete a Type 2 Tier Pension Certificate.

11 AM I A DOCTOR OR THE NEXT SUGAR S APPRENTICE? I AM A CLINICIAN AND AN ENTREPRENUR The new contract wef April 2004 has made the medical practice more of a business; welcome to the world of Entrepreneurship. To achieve above-average rewards, GPs have to be prepared for change, willing to embrace new opportunities and positive in setting up the right systems It is no longer good enough simply to expect money to flow in for being a good doctor, since such a policy always produces a mediocre financial reward. If applying for a Partnership - may be asked to present a business presentation!

12 OTHER BITS & PIECES THE PRACTICE HAS TO PAY THE EMPLOYER SUPERANNUATION WEF APRIL WITHDRAWAL OF CHILD BENEFIT INCOME OVER 50K Private bank account could be part of your statutory business records if you put business transactions through it? That would mean you would have no right of appeal against an HMRC request to see the statements. HMRC can generally only demand private bank statements if they are reasonably required to check a tax return. A taxpayer can appeal against this. However a recent decision in the first-tier tax tribunal rejected a sole trader s contention that business expenses put through a private bank account should be treated as capital! IT IS POSSIBLE TO CLAIM A REFUND OF NATIONAL INSURANCES WHEN BOTH SALARIED & SELF OOH IS CLASSED AS SELF EMPLOYED INCOME

13 TAX PENALTIES- WEF APRIL 2011 The penalties for filing your tax return late are: * Day one: you will be charged an initial penalty of 100, even if you have no tax to pay or you have already paid all the tax you owe * Three months late: you will be charged an automatic daily penalty of 10 per day, up to a maximum of 900 * Six months late: you will be charged further penalties, which are the greater of 5 per cent of tax due or 300 * Twelve months late: you will be charged yet more penalties, which are the greatest of 5 per cent of tax due or 300. In serious cases you face a higher penalty of up to 100 per cent of the tax due. Penalties for paying your tax late are: * Thirty days late: you will be charged an initial penalty of 5 per cent of the tax unpaid at that date * Six months late: you will be charged a further penalty of 5 per cent of the tax that is still unpaid * Twelve months late: you will be charged a further penalty of 5 per cent of the tax that is still unpaid These penalties are on top of the interest that HMRC will charge on all outstanding amounts, including unpaid penalties, until your payment is received. Penalties will be automatically sent to all Self Assessment taxpayers who do not file and pay on time. Taxpayers will be able to appeal against any penalty on the grounds that they have a reasonable excuse for not complying on time. All penalty notices will include an appeal form and details on how to appeal.

14 AND FINALLY Consider getting on the property ladder ASAP. Have you claimed for your professional subscriptions not courses when you were training? Tax relief may be available If you have any queries please call or E mail Cathy Tew CTA, ATT,ACPA CATHY TEW ASSOCIATES Chartered Tax Advisers, Accountants & Business Advisers to small businesses within the Medical & Dental Professions 2 nd Floor, The Portergate,257 Ecclesall Road, Sheffield S11 8NX Telephone : Mobile cathy@cathytewassociates.co.uk DEDICATED TO MINIMISING TAX LIABILITY AND FOSTERING FINANCIAL SUCCESS FOR SMALL BUSINESSES WITHIN THE MEDICAL & DENTAL PROFESSIONS