Clear and hassle-free advice for 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.
- 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.
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.
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
• 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
• 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…
As lockdown slowly eases across the UK, we look at some of the practical issues faced by individuals already impacted by COVID-19. One issue we are being asked about is the impact of buy-to-let landlords who have decided to take a mortgage payment holiday. We outline the impact of this and how this can affect your tax payment for the year.
In March, the Government announced that homeowners struggling to pay their mortgages due to Coronavirus would be able to take a three-month mortgage payment holiday. They confirmed that this option would also be available to buy-to-let landlords, who may suffer cashflow difficulties if, as a result of the virus, their tenants were unable to meet their rent in full when it is due. In May, the Government announced that those struggling to pay their mortgages because of the impact of Coronavirus would be able to extent their mortgage payment holiday by up to three months.
Where a landlord opts to take a mortgage payment holiday, what impact does this have on tax relief for interest payments and, in turn, their tax payments?
Interest continues to accrue
The first point to note is that interest continues to accrue during the period of the mortgage holiday, although the landlord will not be required to make any payments during this time. This is important and will impact on the timing of the associated interest relief, which will depend on whether accounts are prepared on a cash basis or on the accruals basis.
At the end of the holiday, the missed payments and interest may be recovered by extending the term of the mortgage or by making higher payments once payments restart.
Relief as a basic rate tax reduction
From 2020/21 onwards, tax relief for finance costs (such as mortgage interest) on residential properties is given only as a tax reduction at the basic rate. This means that 20% of the allowable finance costs are deducted from the tax that is due.
Impact of a mortgage holiday – Cash basis
Most landlords whose rental receipts are £150,000 a year or less will prepare the accounts for their property rental business under the cash basis. As expenditure under the cash basis is recognised when paid, if the landlord does not make a payment, there will be no relief for that expense until the payment is made.
Where the landlord takes a mortgage, no interest will be paid during the period of that holiday. As a result, a landlord may pay less in interest in 2020/21 than in 2019/20. The interest rate reduction is calculated by reference to the interest paid in the year.
Ali has a buy-to-let property on which he has buy-to-let mortgage, the interest on is £500 per month. As a result of the Covid-19 pandemic, his tenant struggles to pay his rent on time. Ali takes a three-month mortgage payment holiday. The mortgage term is effectively extended as a result.
In 2020/21, Ali only makes nine mortgage payments instead of the usual 12, paying interest of £4,500 rather than £6,000. The tax reduction for 2020/21 is £900 (£4,500 @ 20%) rather than £1,200 (£6,000 @ 20%).
Tax reduction – accruals basis
Under the accruals basis relief is given for the period in which the expense arises rather than when payment is made. As interest continues to accrue throughout a mortgage holiday, the landlord will be able to claim the full tax reduction on the interest accruing in the 2020/21 tax year, even if the interest was not paid in full in the year because the landlord took advantage of a mortgage payment holiday.
So if, in the above example, Ali prepared his accounts for 2020/21 on an accruals basis, he would be able to claim a tax reduction of £1,200, whereas under the cash basis his deduction will only £900, the higher deduction will of course reduce any rental profits (or increase a loss) subject to tax and thereby reduce any tax payable in the year.
If you need advice regarding your rental properties please call us on 0114 272 4984 or email firstname.lastname@example.org.
Under the dreadful cloud of COVID-19 some major tax changes are seemingly going under the radar. One such change is lettings relief, a previously valuable tax break available to those selling their home which was rented out at some stage. This tax mitigation opportunity has now been abolished and has been replaced with a much less attractive tax break which severely restricts the circumstances in which relief is available. We explain the changes here.
Lettings relief provided additional relief for tax where a property that has been occupied as a main residence is let out. For disposals prior to 6 April 2020, a substantial tax relief was available where a property was let as long as that property had at some time been the owner’s only or main residence.
However, availability of the relief is now seriously curtailed in relation to disposals on or after 6 April 2020. Under the new rules, lettings relief will only be available where the homeowner and their tenant are in occupation of the property at the same time – shared occupation. So from 6 April 2020, relief is only available where the owner shares the property with the tenant, a move which seriously narrows any claim that could have been made under the previous rules.
The new-style (narrow) relief
For disposals on or after 6 April 2020, the new lettings relief is available where:
- part of the property is the individual’s only or main residence and
- another part of that property is let out by the individual, otherwise than in the course of a trade or a business.
The gain relating to the let part is only chargeable to capital gains tax to the extent that it exceeds the lesser of:
- the amount of private residence relief; and
Spouses and civil partners can take advantage of the no gain/no loss rules to transfer the property or a share in it to each other without a loss of lettings relief. Where lettings relief would be available to a transferring spouse or civil partner for the period prior to the transfer, it remains available to the recipient.
Let’s look at how this works in a real life scenario.
Idris brought a three-bedroom house in 2015. He lived in the property for five years until it was sold in May 2020, realising a gain of £90,000. Throughout the time that he lived in the property, he let out two rooms. The let rooms comprised one-third of the property by floor area.
Two-third of the property was occupied as Henry’s main residence, and thus two-thirds of the gain qualifies for private residence relief. This equates to £60,000 (2/3 x £90,000). The remaining gain of £30,000 is attributable to “letting”.
As Idris occupied the property with the tenants, he can claim lettings relief. Previously, Idris would have been able to claim the relief irrespective of whether he lived with the tenants at the same time.
Thus, in Idris’ example, the gain attributable to the letting is only chargeable to capital gains tax if, and to the extent, that it is greater than the lower of:
- 60,000 (the amount of the private residence relief); and
As the gain attributable to the letting is less than £40,000, lettings relief is available to shelter the full amount of the gain. As such no capital gains tax arises.
Although in this example the entire gain is free from tax, the circumstances in which the relief can be claimed is much narrower than before and will definitely bring more people into the tax net.
In addition, the requirement for shared occupation will apply not only to future lettings but also any let periods before 6 April 2020.
This means that people who have let properties after they moved out will lose the relief that they would have been entitled to for those letting periods. In effect, the change is retroactive and, as such, will have a massive impact on unwary homeowners.
This change to how selling your home is taxed is harsh, both because of the retroactive impact and because of the sudden impact of the change. There are no transitional measures are in place and, considering letting relief has been around for 40 years, this has been criticised by tax advisory sector.
If you need tax advice in selling your home please call us on 0114 272 4984 or email email@example.com.
Most businesses have suffered due to the COVID-19 pandemic, but should you take the option to defer your tax payment on account to 31 January 2021? We weigh up the option below.
To help those suffering cashflow difficulties as a result of the Covid-19 pandemic, the Government have announced that self-assessment taxpayers can delay making their second payment on account for 2019/20. The payment would normally due by 31 July 2020.
Under self-assessment, a taxpayer is required to make payments on account of their tax and Class 4 National Insurance liability where their bill for the previous tax year is £1,000 or more, unless at least 80% of their tax liability for the year is deducted at source, such as under PAYE. Each payment on account is 50% of the previous year’s tax and Class 4 National Insurance liability. The payments are made on 31 January in the tax year and 31 July after the end of the tax year. If any further tax is due, this must be paid by 31 January after the end of the tax year. In the event that the payments on account are more than the final liability for the year, the excess is set against the tax due for the next tax year or refunded.
The normal payment dates for payments on account for the 2019/20 tax year are 31 January 2020 and 31 July 2020, with any balance due by 31 January 2021.
Delay not cancellation
The thing to note is that the option on offer is a deferral option not a cancellation. Where this is taken up, the payment on account must be paid by 31 January 2021. As long as payment is made by this date, no interest or penalties will be charged.
Should I pay if I can?
The deferral option is clearly advantageous to those who have taken a financial hit during the Covid-19 pandemic, particularly those operating in sectors where working is not possible during the lockdown, such as hairdressers and beauticians and those operating in the hospitality, leisure and retail sectors.
For those who have not taken a financial hit or who are otherwise able to pay, from a cashflow perspective it may be attractive to defer the payment. However, this may simply be a case of delaying the pain; not only will the delayed payment on account be due on 31 January 2021 together with any Class 2 National Insurance liability, but also the first payment on account for 2020/21. This may amount to a sizeable bill and as such it may be better to spread the payments rather than be faced a lump sum on 31 January 2021.
The decision as to whether to pay or defer is a personal one; but the option to choose is a welcome one. We recommend you aim to work out your 2019/20 tax liability early and have a discussion with your accountant as to the best course of action. At the same time, looking further forward and doing an estimated calculation of your potential tax liability for 2020/21 (COVID-19 tax year) will help identify any planning opportunities.
If you would like help deciding whether to defer or not please call us on 0114 272 4984 or email at firstname.lastname@example.org.