First in a series of articles where we give advice on your most frequently asked questions.
Peter Lambert FCCA
A fellow of the Chartered Association of Certified Accountants Peter has over twenty five years’ experience, joining DBS in 2009 after working within the corporate sector. He handled monthly and annual reporting, business planning which included mergers and acquisitions. Peter now specialises in all areas concerning Associate Dentists and thoroughly enjoys dealing with his clients. This includes the introduction to self employment following their Foundation Dentist year, preparing annual accounts, advising tax liabilities and advising in their future business moves through to practice acquisition.
Question
I have finished my Foundation Dentist year and have recently started in practice. I have received my first pay schedule which was a great feeling; however it was shortly followed by worry. I am aware of sorts that I need to keep my financials in order specifically, as I am now classed as an associate and I am not sure where to start, what to keep, what to claim back and how?. The last thing I want is to find myself with a huge tax bill, of which I have heard the odd horror story!
Answer
Firstly please don’t feel alone or that you don’t know things that others do. Most of my new Associate clients come to me feeling they should have more of an understanding of finance. The facts are that through all the years of academic study very little of that is given to business management, which ultimately starts with managing your financial affairs. There are various areas you need to consider, these being the most important;
- •Registration with HM Revenue & Customs to comply with tax and national insurance regulations,
- •Records you need to keep such as; pay schedules, receipts for subscriptions and malpractice insurance along with any other business expenses,
- •You have an annual requirement to prepare a set of accounts,
- •An annual requirement to prepare and submit a tax return on time; without incurring penalties,
- •Requirement to make twice yearly tax payments.
There are obviously many other areas you need to become familiar with and potentially seek advice on. One of the biggest tips on tax I can offer, is to as fast as possible, get into the habit of removing what would be as an employee your tax amount. Take it away from your mainstream finance so when your tax bill arrives you are prepared. Dealing with your accounts earlier also presents more opportunities to reduce your tax bill, bearing in mind the income tax return submission deadline is 31 January annually.
Your more effective option is to seek advice and counsel on such matters, knowing you are dealing with experts will allow you to apply the time to develop an excellent service for your patients and utilise your clinical skills.
Ultimately as your career develops and in time you buy your own practice, you would have the foundations and confidence in an existing relationship to trust them with moves to practice acquisition, finance and tax planning.
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