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Personal Finance for GPs

Personal Finance for GPs. Jenny Stone, ACA Ramsay Brown and Partners Ramsay House 18 Vera Avenue London N21 1RB Tel: 202 8370 7705 E-mail: Jenny@ramsaybrown.co.uk. Employment v Self Employment. Employed GPs Tax, NI and pension contributions deducted monthly

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Personal Finance for GPs

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  1. Personal Finance for GPs Jenny Stone, ACA Ramsay Brown and Partners Ramsay House 18 Vera Avenue London N21 1RB Tel: 202 8370 7705 E-mail: Jenny@ramsaybrown.co.uk

  2. 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

  3. 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

  4. 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 £15,0001 Total due £45,000 31st July 2010 2nd Pymt on account 2009/10 £15,0002 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

  5. 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

  6. 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

  7. 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

  8. 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 • Don’t opt out of scheme • Website www.nhspa.gov.uk

  9. 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!!

  10. QUESTIONS?

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