fbpx
Google Rating
4.9
Based on 70 reviews
×

What medical school didn’t teach us about moneyW2

Last week we introduced the concept of a financial plan, calculating net worth and you should have written down some goals and made an fPDP.

Do all the goals on your fPDP involve more money? Now, you could simply work harder to get more money. Or you could maximise the income you already have, without doing more work. Skeptical? Read on to find out about tax reliefs for doctor’s worth £thousands.

Avoid making charitable donations to HMRC

What will be your greatest single expenditure in life? Mortgage? Household bills? Transport costs? Holidays? No, it’s likely your biggest expense will be the total taxes you pay to the government. Therefore, it makes sense to make very sure you are paying only the tax you need to.

Sounds simple right? In reality, this is very complex to do well and the more senior you get, with multiple income streams and multiple tax thresholds and reliefs to think about, the more complex it gets. At that point, you could benefit from professional advice from a specialist medical accountant. Until then here’s some things to think about.

1 – Claim a tax rebate.

Estimated saving minimum £2,262

Claiming a doctors’ tax rebate can reduce the costs doctors have to pay on tax deductible expenses such as exams, GMC fees, Royal College fees etc by up to 40%. For example, a GP trainee would expect to incur Professional Fees of around £5,656 in the 5 years from FY1 to their final year which could save them £2,262 in tax – and that assumes they pass all their exams first time. The longer the training, and the higher the total exam costs the more tax relief you will be eligible for.

We have produced free step by step guides to claiming tax relief for doctors which you can download here.

https://www.medicsmoney.co.uk/free-guide/

Not sure if it’s worth claiming? It absolutely is, but you can run a quick crude calculation here

https://www.medicsmoney.co.uk/doctors-tax-rebate-calculator/

2 – Check your tax code.

Estimated value £varies

A big problem for doctors is tax code errors. As we switch jobs in, say, August we will usually receive a payslip from our old employer and our new employer, confusing HMRC into thinking that we are working 2 jobs and applying the wrong tax code. Luckily we’ve made a free step by step guide to sorting out your tax code.

Here’s our guide to checking your tax code is correct.

https://www.medicsmoney.co.uk/is-your-doctors-tax-code-correct/

3- Claim travel and relocation expenses.

Value up to £8,000 over course of training

You may be able to claim up to £8,000 tax free relocation expenses during training. This can include paying your stamp duty, removal fees, legal fees and can include travelling expenses between hospitals. Further information can be found here https://heeoe.hee.nhs.uk/faculty-educators/policy-reimbursement-removal-or-rotational-travel-expenses

If you are a GP trainee on GP placement you can also claim mileage to and from work in certain circumstances. This explains more https://www.bma.org.uk/advice/employment/gp-practices/gps-and-staff/reminbursement-of-gp-trainee-travel-expenses-for-your-practice

More information about mileage claims here

https://www.medicsmoney.co.uk/doctors-tax-relief-on-mileage-and-travelling-for-work-using-own-car/

4- Got children? You could claim child benefit.

Estimated value annually £1,076 one child £712 for each additional child

You can claim child benefit for each child you’re responsible for. If your income exceeds £50,000 per year you’ll receive a reduced amount and need to complete Self-assessment and if your income exceeds £60,000 you will need to tell HMRC immediately. Somewhat bizarrely, if one parent earns £61,000 per year and the other earns nothing (total household income £61,000) you can’t claim but if both parents earn £49,999 or less (total household income £99,998) you can claim the full amount. The whole claiming process can be completed online. Details how to claim here

https://www.gov.uk/child-benefit

5- Tax free childcare

Estimate value – Tax free childcare £2,000 per child per annum. 30 free hours a week £2400* estimate based on 570 hours a year.

https://www.childcarechoices.gov.uk

You can get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both. Be aware if your income goes over £100,000 p.a. you will no longer be able to claim.

6 – If doing extra/private work think about tax efficient remuneration structures.

This is NOT as straightforward as simply starting a Ltd company to “save tax”  https://www.medicsmoney.co.uk/limited-company-for-gp-locum-doctors-and-consultants/

7 – Is your contract and pay correct?

If you’re a member, the BMAs contract checking service may be useful.

8- Understand your payslip.

Your payslip is like the anatomy and physiology of your finances. Understanding it is essential you getting control of your finances. Here’s an overview of a doctors payslip.

https://www.medicsmoney.co.uk/doctors-pay-slip/

By now you should have thought about your financial PDP (fPDP) and how to work tax efficiently. If you are at the start of your career, with the resources I linked to above, you can make yourself tax efficient. If you are more senior ST5 or above, or earning six-figure income, with multiple income streams and still doing your own self-assessment; STOP.  Get yourself a specialist medical accountant – or at least consider it.  It’s very likely they will save you more than they cost you. There’s too many mediocre accountants out there and that was why we created Medics’ Money. We have gathered together the best specialist medical accountants, verified by us with reviews by doctors like you. Best of all, you can book a free consultation with one right now.

https://www.medicsmoney.co.uk/medical-accountant-search/

Week 2 goals

 1 – Use Medics’ Money free resources to make sure your tax code and tax reliefs are correct.

2 – Think about other ways you can become tax efficient such as child benefits and tax free childcare.

3 – Check your contracts and pay banding are correct.

What medical school didn’t teach us about money

“What medical school didn’t teach us about money” will give doctors a step by step plan to transforming your financial future. Enter your details to download your copy now

The Medics’ Money New to GP Partnership Course is run for GP Partners by GP Partners

The Medics’ Money New to Partnership Course will empower GPs to learn the essential business skills to run your GP business. Using our skills as GPs, accountants & tax advisers, we’ve selected the best advisers to teach and support you on the Medics’ Money New to GP Partnership Course.

Working with