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Financial Planning

Financial Planning. Calderdale Royal Hospital Ian Simmonds Director, Medical Services Ian.simmonds@rsmtenon.com Richard Apps Director, Medical Services richard.apps@rsmtenon.com. Financial planning. Self employed tax and national insurance Expense claims GP Partners NHS Pension Scheme

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Financial Planning

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  1. Financial Planning Calderdale Royal Hospital Ian Simmonds Director, Medical Services Ian.simmonds@rsmtenon.com Richard Apps Director, Medical Services richard.apps@rsmtenon.com

  2. Financial planning • Self employed tax and national insurance • Expense claims • GP Partners • NHS Pension Scheme • Our clients • RSM Tenon medical services

  3. Self Employed Tax & National Insurance • Register with HMRC (Fine system) • Decide on accounting period end • National Insurance Contributions (NIC) • Class 1 • Class 2 (NICO) • Class 4 • Income tax under self assessment

  4. Self Employed Tax & National Insurance • Tax Return • 2011/2012 covers 6 April 2011 to 5 April 2012 • Filing deadlines • On line 31 January 2013 • Paper 30 September 2012 • Tax payments – the nasty bit ! • 31 January and 31 July (poa) • Good cashflow initially • Mechanics

  5. Self Employed Tax & National Insurance Tax Savings • A set proportion of net income – 35% - 40% as a guide • Choices • Own bank account • Spouse bank account • Offset mortgage • Others – e.g. ISA’s/Premium Bonds • Please note self employed earnings should be declared when work undertaken rather than when monies received

  6. Self Employed Tax & National Insurance Tax Payments e.g. commence as a locum in August 2012 and prepare accounts to 31 March • Period ended 31 March 2013 locum earnings of £40k • Year ended 31 March 2014 locum earnings of £60k • Year ended 31 March 2015 locum earnings of £80k • Assume all tax payable at 40% • 2012/2013 Period ended 31 March 2013 40,000 @ 40% 31 January 2014 16,000

  7. Self Employed Tax & National Insurance Tax Payments • 2013/2014 Year ended 31 March 2014 60,000 @ 40% 31 January 2014 (2012-13) Bal 16,000 31 January 2014 POA 8,000 24,000 31 July 2014 POA 8,000

  8. Self Employed Tax & National Insurance • 2014/2015 Year ended 31 March 2015 80,000 @ 40% 31 January 2015 24,000 Less: POA(16,000) 8,000 2014/2015 First POA 12,000 £20,000 31 July 2014 POA 12,000

  9. Claiming for Expenses • Superannuation contributions – more later • Professional indemnity insurance & subscriptions • Car • Home is base for locums • Mileage log for business journeys • Fixed rate claim (if income < VAT threshold) • Business use proportion • Surgery is base for Partners • General use of home as office (HMRC Amnesty)

  10. Claiming for Expenses • Others • Mobile telephone • Internet • Courses & training • Postage & stationery • Computer equipment • Medical consumables • Spouse salary • Others

  11. Claiming for Expenses • Record Keeping • Ease of identification • Dedicated bank account (spare) • Business credit card • Retention of records for ~ 7 years • Tax return details • Income taxed at source • Investment income • Personal pension contributions • Buy to let properties • Share dealing

  12. GP Partners • Types • Salaried • Fixed share • Equity (possible parity build up) • Responsibility for tax – draw gross or net • Accounting year end varies • Surgery ownership • Notional Rent • Loans • Partnership agreement • Current/capital accounts (cashflow funding)

  13. Summary – Good Habits Reminder • Register as self employed with HMRC • Save (in a separate account) 35% - 40% of income to cover future tax liabilities • Keep all your receipts • Maintain a mileage log • Use a separate credit card for business expenses • Retain your records for ~ 7 years • Employ a specialist medical accountant

  14. NHS Pension SchemeThe Practicalities • Superannuation Rates • Employers 14% (Locum paid by host PCT) • Employees 5%, 6.5%, 7.5% or 8.5% (Paid by Locum) • From 2012/2013 employee rates increase by 2.4% • GP Locum Forms (A & B) • GMS, PMS & APMS • GP principal annual pension certificate • GP solo - non practice earnings and OOH’s

  15. NHS Pension SchemeThe Practicalities - continued • Officer scheme – Final Salary • Practitioner scheme – Dynamised career average earnings • Locum companies • Tax relief on GP pensions • Salaried GP Type Two Certificate

  16. Engaging an Accountant • Background details • Money laundering checks • Hold a meeting • HMRC 64-8 • Letter of Engagement • System of checklists • Bookkeeping requirements • Regular communication – tax due dates • Likely cost – Locum and Salaried GP (tax relief)

  17. RSM Tenon medical services • RSM Tenon acts for over 430 GP practices nationwide • Local Yorkshire, Lincolnshire and North West team of medical specialists • Annual performance review • Fixed fees agreed in advance • Regular meetings to discuss and resolve current issues • Unlimited telephone support • No obligation initial meeting

  18. Financial Planning Calderdale Royal Hospital Ian Simmonds Director, Medical Services Ian.simmonds@rsmtenon.com Tel: 01257 518081 Richard Apps Director, Medical Services richard.apps@rsmtenon.com Tel: 0113 2445451 Sean McLernon Director, Medical Services sean.mclernon@rsmtenon.com Tel: 01706 355505

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