Personal Tax Allowance
The full personal allowance is only available where net income is below £100,000. Once income exceeds £118,880 then your personal tax allowance is lost completely. It is obvious to try and ensure that you avoid this narrow band if at all possible.
This is a somewhat emotive subject but it must be stressed that a record of the correct details should be kept each year. There are more incidences of HMRC challenging expenses and you should therefore seek professional advice on this issue. (Our personal expenses checklist guide is available upon request)
Are your assets held efficiently?
If you are in receipt of other, non-medical income, such as income from property, are these assets owned by the correct spouse from an income tax point of view. Similarly, could such assets be pleased in a more efficient manner from both an inheritance tax and capital
gains tax perspective? The individual circumstances of each spouse could provide a solution.
The annual investment allowance of 100% is now available on the initial £250,000 of capital expenditure. For cars with low emissions, 95 grams per km, there is a similar 100% first year allowance. However this is restricted by any private use element.
For 2013/14, the maximum that a person can invest is £11,520 including a cash maximum of £5,760. For Junior ISA's the invested funds remain locked until the child becomes 18. However both parents and other relations can pay funds into such ISA's. The limit for 2013/14 is £3,720
National Insurance Contributions
If you hold an officer post in addition to your practice profits ensure that any overpaid National Insurance Contributions are reclaimed.
Gift Aid Donations
Ensure that higher rate tax relief is obtained on your donations, under gift aid, to charities.
Many G.P's are experiencing a fall in profits. It may well be correct to apply for a reduction in your payments on account of tax; however you must liaise with your accountant before doing so. Other factors will have a bearing on matters, an example being possible reduced superannuation contributions.
Saving for Tax
An average G.P. will be required to save approximately one third of their profit share for both income tax and Class for National Insurance Contributions. Please ensure that such savings are made and obtain as much advance warning of liabilities from your accountant.
Perhaps the least known, but now highly pertinent tax in the current climate. A G.P. should obtain an NHS Pension Forecast so that an assessment can be made as regards the possibility of exceeding the 'annual allowance' or 'lifetime' allowance'. Specialist independent advice should be taken to review the possible options in order to reduce any such taxes. Your financial adviser must be authorised and regulated by the Financial Conduct Authority to give such advice. (Kevin Walker, our NHS Pension expert is authorised and as an independent financial adviser he will be able to talk you through the options so you can make informed decisions. Contact us if you wish to speak to him or a member of our team)