Clear and hassle-free advice for dentists
Dentists
Clear and hassle-free advice for dentists.
Shipleys have been using their specialist knowledge in the Dental field for over 11 years.
We act for Dental clients of all sizes ranging from associates and single-handed practices to larger partnerships and corporates, as well as dental practice linked health clinics, hygienists and consultants and specialists (including orthodontists, endodontists, oral surgeons, and periodontists).
The health industry has seen a surge in growth in recent years, achieved against a back drop of challenges from fundamental reforms to the NHS. Dental practices need to be proactive in providing more of the advanced and enhanced services on top of the essential services to ensure a successful business.
Sections
- Dental Principals and Practices
- Dental Associates and Self Employed DCPs
- Tax planning services for Dentists
Dental Principals and Practices
At Shipleys Tax we understand the specific needs of dental practices and the partners involved. Wholesale reforms to the NHS mean dental practices need to re-position themselves in the new system and be able to devote maximum time to administration of patient care. That is where our team can help by providing specialist knowledge on your accounting and tax matters leaving you to concentrate on the patients.
Why do you need a specialist dental accountant?
• Knowledge of NHS general practice and the expert advice we provide can be instrumental
• Understanding how practices are funded by NHS England (formerly PCTs)
• Be familiar with the GDS/PDS provider contracts, the dental contract reforms and the impact of the NHS pension scheme
• Be up to speed on UDA values in practice and the developing primary care dental market.
• Deal competently and promptly with all taxation matters and with dentists’ superannuation.
Why us?
We aim to do more than produce the annual accounts and handle the principals’ tax affairs.
Personal service – you will deal with one particular partner and their same support team and not be passed around
Timely – the annual accounts will be prepared to agreed time scales and we will visit the practice to discuss
Prompt – we will deal promptly with routine queries, telephone calls and emails and advise on bookkeeping, cash flow and monitoring partners’ drawings without making additional charges.
Tax planning – we will discuss ways to minimise your overall tax liability and spot opportunities.
We have nationwide coverage and are happy to come and visit you.
Cost
What out basic annual fee covers
• Annual accounts preparation.
• Meeting Principals to discuss draft accounts
• Partnership tax return and tax computation
• Advising on projected profits and tax liability
• Partners’ personal tax returns
• Ad hoc email and telephone queries
• Opportunities for tax planning for both business and personal affairs
We also advise on:
• Setting up a limited company for non-NHS or associate income
• Setting up a limited company and transferring the business tax efficiently
• Handling HM Revenue & Customs’ investigation into the practice
• Payroll
• NHS superannuation issues
• Specific tax planning strategies for reducing IHT, CGT and Stamp Duty
Dental Associates and Self Employed Dental Care Professionals (DCPs)
We have acted for Dental associates and Hygienists for many years and understand the needs of the dental profession.
What does the service include?
• How to register with HMRC
• How to set up and advising on Employed vs Self employed status and NIC implications
• Proactive advice on tax allowable business expenses, professional subscriptions
• Advice on employing a spouse
• Preparation of annual Accounts and tax returns for HMRC
• Advice on NHS superannuation issues
• Help with Student Loan deductions
• Ad hoc telephone and email advice
As well as providing accounting and income tax advice we can also advise on the following areas:
• Incorporation of your business via a limited company
• Impact on superannuation on incorporation
• Assist with raising finance from banks
• Dentists from overseas
• Inheritance tax planning
• Property tax planning
After a few years as an associate, many dentists look to acquire a practice of their own; we will handhold you through the whole process including:
• Most tax beneficial way to set up a practice of your own
• Reviewing target practice accounts and advising on matters that require further investigation or explanation
• Introducing clients to solicitors who experienced in dealing with the purchase of dental practices
• Introducing clients to banks who have specialist healthcare managers who understand the dental market and who can provide loans for practice purchases
• Advising on redundancy/staff issues on acquisition and payroll arrangements
• Advising about record keeping systems
• Advising about tax planning to ensure that the deal is done in the most tax efficient way
Why us?
• Save you money – proactive services ensuring you are aware of tax savings
• Knowledge you can rely on – we have a wealth of tax expertise in the healthcare sector
• Planning – ensuring you are aware of tax liabilities and payment dates enabling you to plan your cashflow
• Peace of mind – we have many years of experience in dealing with the tax affairs of medical and hospital consultants
• Help you minimising risk of HMRC enquiry
• We have nationwide coverage and act for Dentist clients based throughout the UK.
Our basic fees are £395 + VAT for associates
Tax planning for Dentists
Tax law never stands still and goal posts are always moving. It is crucial that you have the right adviser to guide you through the maze and help reduce your tax bill through legitimate and transparent means.
Shipleys Tax has a number of specialist tax advisers with wealth of experience in the medical sector who can talk to you about the many tax saving opportunities.
We always say the best tax planning is done before a major event in the business so seek advice early on in the lifecycle of a transaction. Some areas to consider:
• Buying or Selling a dental practice – huge tax saving opportunities both personal and corporation tax
• Health clinic linked dental practices – most tax efficient trading structures
• Reduce inheritance tax on death
• Reduce stamp duty land tax on buying
• Offshore tax planning advice for certain businesses
• Provide property development strategies
• Use of EIS/SEIS and corporate venture vehicles
• Use of LLPs and corporate partnerships
• Asset protection and preservation of wealth
• Estate planning and succession
Latest news & blogs…
TAXING BEAUTY – HMRC’s new approach to VAT for cosmetic procedures
DUE TO THE rapid growth of the private cosmetic medical sector in the UK, some noticeable shifts have begun to appear in HMRC’s approach to VAT in the cosmetic medical sector. HMRC have reportedly now established a dedicated team to examine the VAT implications of treatments such as Botox, skin fillers and facial peels.
In today’s Shipleys Tax brief, we consider whether HMRC’s position is now seemingly leaning towards categorizing certain treatments as standard-rated for VAT rather than exempt.
Historical Stance vs. Current Direction
While traditionally, treatments aimed at medical purposes have often been exempt from VAT, those perceived as purely cosmetic have leaned towards being standard rated (20%). This distinct separation is becoming more blurred. Procedures that serve dual purposes, such as Botox, now find themselves in a VAT grey area. There’s a growing inclination from HMRC to classify certain ambiguous cosmetic treatments as standard-rated unless they solidly fit within the medical exemption.
There’s a growing inclination from HMRC to classify certain ambiguous cosmetic treatments as standard-rated unless they solidly fit within the medical exemption.
Recent court case
In one recent tribunal case involving a prominent skin clinic, these VAT issues were brought to the forefront. The clinic had applied for a VAT credit for a specific timeframe, a claim which HMRC challenged asserting that the services during that period were not exempt from VAT.
During the tribunal, a wealth of evidence was presented, including testimonies from the clinic’s lead practitioner, a highly qualified registered medical professional who had pivoted to ‘aesthetic medicine’ and operated the clinic, offering an array of cosmetic treatments.
While the tribunal acknowledged the lead practitioner’s expertise and dedication to professional ethics, it ruled that that cosmetic treatments provided by the clinic did not qualify for VAT medical exemption. It found that the treatments were for “aesthetic reasons” and not for clinical reasons.
The Impact
This evolving stance means that businesses offering cosmetic treatments need to be extra vigilant. The ruling underscores the importance of the nature and intent behind services in determining VAT status, emphasizing the need for meticulous record-keeping and understanding of HMRC’s evolving views on VAT exemptions in the cosmetic medical sector.
…cosmetic treatments provided by the clinic did not qualify for VAT medical exemption. It found that the treatments were for “aesthetic reasons” and not for clinical reasons.
How Shipleys Tax can help
With the landscape shifting, our Shipleys VAT team can help ensure that your practice remains compliant, anticipating and adapting to any changes in HMRC’s perspective on VAT within the sector.
Adapting to change is vital in today’s dynamic environment and ensuring your practice stays ahead and compliant is crucial to avoid falling foul of the legislation.
If you would like assistance, or would like more information, please call 0114 272 4984 or email info@shipleystax.com.
Please note that Shipleys Tax do not give free advice by email or telephone.
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Offshore Companies and Rental Income Tax
HMRC IS SENDING letters to some offshore (non-resident) companies that appear to have failed to notify that they own commercial property in the UK.
In today’s Shipleys Tax note we look at what this means for overseas landlords owning property in the UK and what you need to do to avoid falling foul of HMRC’s rules.
From Income Tax to Corporation Tax
Before 6 April 2020, rental income garnered by non-UK resident companies fell under the domain of income tax. However, post this date, these companies are required to adhere to corporation tax rules for any liability.
HMRC’s Requirement for Registration
HMRC is actively reaching out to companies that have so far missed registering under either of the tax rules. It appears that their knowledge about these companies and their property holdings originates from HM Land Registry or the newly established Register of Overseas Entities, which itself went live this year on 31 January 2023.
Before 6 April 2020, rental income garnered by non-UK resident companies fell under the domain of income tax. However, post this date, these companies are required to adhere to corporation tax rules…
In these letters, companies are prompted to fill out a certificate to ascertain if there’s a need to declare any unpaid tax on their rental income. Depending on the company’s declaration, they are guided either towards the voluntary disclosure procedure or, in cases of potential tax fraud, towards the contractual disclosure facility.
Additionally, the letters urge companies to evaluate if the UK’s complicated “transfer of assets abroad provisions” apply, especially concerning UK-resident individuals who might have an interest in the company’s income or capital.
Interestingly, this isn’t the first instance of such letters being dispatched. Similar letters were sent to offshore corporates owning UK properties in the past, chiefly concerning residential property income and potential tax liabilities under the annual tax on enveloped dwellings (ATED).
A Warning and the Potential Consequences
HMRC’s current communication comes with a clear warning: Companies are given a window of 40 days to either initiate the disclosure process or provide an explanation if they believe they’re exempt from disclosure. Failure to respond could see HMRC estimating what it believes the company owes, potentially sparking an investigation. This could further culminate in added penalties. The statement in the letter is quite straightforward, stating, “If we later find that you have not told us everything, we’ll view this very seriously.”
Alternative Disclosure Methods?
While the letters might sound imposing, recipients should note that they’re not legally bound to complete and return the certificates. As per the guidance from the Chartered Institute of Taxation (CIOT), there are other disclosure methods at their disposal, some of which might be more suitable than those delineated in HMRC’s letter.
Companies are given a window of 40 days to either initiate the disclosure process or provide an explanation if they believe they’re exempt from disclosure.
According to the CIOT, HMRC cannot compel a taxpayer to use any specific method for their disclosure. Depending on the situation, other methods may be more apt. Therefore, taxpayers and companies should be discerning, consider the unique facts of their situation, and seek advice on the best disclosure approach.
Conclusion
For non-UK resident companies with UK property assets, staying abreast of the latest tax regulations is paramount. With HMRC actively reaching out to those who haven’t registered under the updated tax rules, it’s crucial to understand one’s obligations and rights, ensuring compliance while also leveraging the most appropriate disclosure methods. If in doubt, always seek expert guidance to navigate these complex tax waters.
If you would like assistance, or would like more information, please call 0114 272 4984 or email info@shipleystax.com.
Please note that Shipleys Tax do not give free advice by email or telephone.
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Tax Planning with Beneficial Interest Company Trusts – the challenges for Landlords
THE EVER-CHANGING landscape of UK tax law has prompted landlords to explore alternative legal structures for tax efficient property ownership. One such structure gaining more attention recently is the Beneficial Interest Company Trust (BICT). However, as will be seem below this complex model is not without its challenges and debate.
In today’s Shipleys Tax brief we will look at the workings of a BICT, its potential benefits, drawbacks, and the key considerations for landlords considering this route.
What is a Beneficial Interest Company Trust (BICT)?
A Beneficial Interest Company Trust (BICT) is a legal structure that has gained popularity among landlords in the UK, particularly following changes to the infamous Section 24 income tax relief in 2017 for rental income. BICTs seemingly allows landlords to strategically manage the economic value of their properties in a company, while retaining the “legal” title of the property, and thus the mortgage, in their personal name.
BICTs: The Appeal for Landlords
There are several key reasons why landlords are increasingly adopting BICTs. The trust structure purportedly enables landlords to enjoy personal mortgage rates on properties, while treating them as company assets from a tax perspective. In light of the restrictions on interest relief announced in 2015, landlords can put the rental income from personally held property (and related borrowing costs) through a Limited Company to help minimize their tax liability.
BICTs allows landlords to strategically manage the economic value of their properties in a company, while retaining the “legal” title of the property, and thus the mortgage, in their personal name.
Perceived Key Advantages of BICTs for Landlords
- Mitigating the Impact of Section 24 Interest Relief Restriction: BICTs can help landlords offset mortgage interest against rental income, thus reducing their tax liability.
- Preserving Personal Tax Allowances: BICTs allow landlords to ensure rental income falls within the corporation tax regime, not subject to personal income tax. This can maintain access to personal tax allowances, beneficial when rental income is taxed at higher individual tax rates.
- Future Planning and Flexibility: BICTs offer flexibility for estate planning and asset transfer to future generations. The trust structure allows for the addition of beneficiaries or changing the ownership structure without transferring the property’s legal title.
The Risks and Challenges of BICTs
While BICTs might seem like a silver bullet, they are not without significant complexities and potential pitfalls. Landlords should exercise caution and thoroughly consider these key challenges:
- Complex Legal and Tax Implications: BICTs involve intricate legal and tax arrangements. Ensuring compliance and avoiding unintended consequences requires advice from professionals well-versed in trust law and tax legislation. There is debate within the tax profession about this structure. Some have suggested potential mortgage fraud, mismatch of income and mortgage interest relief, and likely challenges from HMRC on the basis that such a structure is “tax-motivated” rather than commercially motivated and therefore subject to anti-avoidance legislation. HMRC will not provide approval for BICTs because these have nothing whatsoever to do with tax. This is because the company itself has no tax advantages over and above any other form of UK limited company.
- Lender’s Reluctance: Some lenders are wary of BICTs, fearing they could be seen as contrived and fall foul of HMRC anti-avoidance legislation. This perception could impact a landlord’s ability to secure mortgage finance, and if the BICT is deemed a tax avoidance scheme, landlords could face a hefty tax bill.
- Costs and Administrative Burden: Establishing and maintaining a BICT can be costly. The ongoing administrative responsibilities include filing annual accounts and tax returns for the SPV, which can be time-consuming.
There is debate within the tax profession about this structure. Some have suggested potential mortgage fraud, mismatch of income and mortgage interest relief, and likely challenges from HMRC…
- Potential Future Legislative Changes: Tax laws and regulations evolve over time. There’s no guarantee that the current tax advantages linked with BICTs will persist. Future legislative changes could impact the viability of BICTs.
- Financing Challenges: Transitioning properties into a BICT can create financing difficulties. Lenders often have different criteria and loan products for SPVs compared to individual landlords.
To BICT or Not to BICT
BICTs have provided some landlords with a strategy to navigate the tax challenges, but they are not a one-size-fits-all solution, nor are they a sure fit. Each landlord’s circumstances and objectives are unique, making it crucial to conduct a thorough assessment and seek professional advice tailored to your specific situation before considering such a legal structure.
Always remember that tax planning is not a short-term endeavour. Before moving forward with a BICT or any other tax planning strategy, taxpayers need to ensure that they are comfortable with the potential outcomes and have considered all available options.
Consulting with a qualified tax adviser and a mortgage consultant before making any decisions is crucial. As the tax difference between personal name and limited company rates continues to narrow, the cost-effectiveness of BICTs may also change.
In conclusion, while the BICT is an available solution for some landlords, understanding its pros and cons is essential to making an informed decision. Remember, effective tax planning is about strategy, not just short-term gains.
If you are affected by any of the issues above and would like more information, please call 0114 272 4984 or email info@shipleystax.com.
Please note that Shipleys Tax do not give free advice by email or telephone.
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