Personal Finance for GPs

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Personal Finance for GPs

• Jenny Stone, ACA
• Ramsay Brown and Partners
• Ramsay House
• 18 Vera Avenue
• London
• N21 1RB
• Tel [phone]
• E-mail Jenny_at_ramsaybrown.co.uk

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Employment v Self Employment

• Employed GPs
• Tax, NI and pension contributions deducted
  monthly
• Expenses claimed adjusted via tax code
• Self Employed GPs
• Pay tax (including class 4 NI) twice a year
• Payment dates 31st January 31st July
• Three instalments for a tax year
• More expenses can be claimed for tax relief
• Tax return to be submitted

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Becoming self employed

• Required to inform HMRC within three months of
  commencing self employment
• Otherwise liable to 100 penalty
• Need to submit a tax return each year
• Tax Year runs from 6th April to following 5th
  April
• Greater onus on taxpayer

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Example of tax payments

• Tax liability for 2008/09 30,000
• 31st January 2010
• Balance for 2008/09 30,000
• 1st Pymt on account 2009/10 15,000 1
• Total due 45,000
• 31st July 2010
• 2nd Pymt on account 2009/10 15,000 2
• Tax liability for 2009/10 40,000
• 31st January 2011
• Balance for 2009/10 10,000 3
• 1st Pymt on account 2010/11 20,000
• Total due 30,000
• 31st July 2011
• 2nd Pymt on account 2010/11 20,000

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National Insurance

• Employed GPs
• Class 1 11 on earnings from 5,715-43,890 and
  1 on earnings above 43,890
• Self Employed GPs
• Class 2 2.40 per week, payable if earning
  above 5,075
• Class 4 8 on earnings from 5,715-43,875 and
  1 above 43,875
• Deferment of Class 4 NI
• Refund
• Rates from 6th April 2009

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Claiming Expenses

• Employed GPs
• wholly, exclusively and necessarily
  
• Business mileage using the Inland Revenue mileage
  rates, professional subscriptions
  
• Self Employed GPs (Locum/GP Principle)
• wholly and exclusively
• Only claim business usage of expenses which are
  both business and personal
• - Motor Expenses
• - Mobile
• - Computer Expenses

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Dates and Penalties

• Tax return issued 6th April 2009 for tax year
  2008/09
• Deadlines
• Filing Paper Tax return 31st October 2009
• Filing online 31st January 2010
  
• Penalties - automatic 100
• Surcharges - 5 of outstanding tax if still
  unpaid 30 days after due date
• Interest charged on overdue tax
• Inland Revenue enquiries
• Errors - penalty of 100 additional tax

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NHS Pension Scheme

• Benefits
• Fully inflation proof pension
• Calculated based on 1.4 of re-valued lifetime
  earnings
• Tax Free lump sum of 3 x pension
• Pension Contributions
• 5 up to 19,682
• 6.5 on 19,683 - 65,002
• 7.5 on 65,003 - 102,499
• 8.5 on 102,500 plus
• Pensionable earnings
• Salaried GPs Salary
• GP Principals NHS Profits
• Locums 90 of locum pay
• Last chance to buy added years
• Dont opt out of scheme
• Website www.nhspa.gov.uk

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Summary

• Notify HMRC of self employment within 3 months,
  otherwise 100 penalty
• Save for your tax!
• Keep good records and receipts of income and
  expenses
• Know the tax payment dates
• Submit your tax return EARLY!!

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QUESTIONS?