Do I need a specialist medical accountant?
by Dr Ed Cantelo GP Trainee, Chartered Accountant Chartered Tax Advisor
As doctors, it’s usually a case of when, not if, we will need an accountant. But how can you tell when you would benefit from some advice?
As a Doctor but also a Chartered Accountant and Chartered tax advisor I frequently come across colleagues who are paying too much tax. Engaging an accountant with the specialist knowledge of the medical sector would be one way to avoid this. But with time short due to rota gaps, exams and increasing workload, many doctors put off looking after their finances, potentially costing themselves thousands. Here are a few common situations where you would benefit from using an accountant with specific knowledge of the medical sector:
The impact of your personal pension contributions, annual allowance and life time allowance.
Do you pay into the NHS pension scheme? Are you aware that if you and your employer contribute too much then you could suffer a tax charge? The rules are extremely complex but we can connect you to an expert to help you. If you haven’t done so, check your pension statement via https://www.nhsbsa.nhs.uk/employee-section If you have a threshold income greater than £110,000 per year, or an adjusted income of £150,000 per year (or more) you could get a large annual allowance tax charge. We can match you with a specialist today who can advise you on pension issues.
If you are employed by the NHS and doing private or locum work.
This scenario has tax and pension implications and professional advice and planning could save you a lot of money. Your National Insurance position needs to be carefully calculated to avoid paying too much tax. If you work via a limited company then advice from an accountant should be sought due to recent changes in IR35 legislation. Find an independent specialist medical accountant and book your free initial consultation here.
If you are self-employed, for example, as a Locum GP.
If you are self-employed you will be responsible for telling HMRC how much you earn and paying the tax on your profits via Self-assessment. Whilst it is possible to submit self-assessment yourself, if you are a self-employed doctor we would recommend a specialist medical accountant. Find an independent specialist medical accountant and book your free initial consultation here.
If you spent in excess of £2,500 in any one tax year e.g. on exams, Royal College fees, BMA fees, Indemnity fees etc.
£2,500 is the threshold at which HMRC require you to complete a Self-assessment tax return in order to claim tax relief on employment expenses. It’s perfectly possible to complete Self-assessment yourself, but once your finances reach this level of complexity you may benefit from an accountant as any mistakes could end up costing you a lot more than an accountant’s fee. Find an independent specialist medical accountant and book your free initial consultation here.
If you are renting out a second home
If you are renting out a home you will likely need to declare your rental income and pay tax on any rental profits. An accountant will help you calculate these profits, offset some of the costs to reduce your tax bill, and help with the resulting Self-assessment tax return which will be due. When you sell the property there could be potential tax reliefs to utilise.