Download Report

Financial Planning &
NHS Pension Scheme
Calderdale Royal Hospital
8 April 2014
www.bakertilly.co.uk
Financial planning

Self employed tax and national insurance

Expense claims

GP Partners

NHS Pension Scheme

Our clients

Baker Tilly medical services
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

Student loans

Employed as salaried GP

Companies
Self Employed Tax & National Insurance

Tax Return
 2013/2014 covers 6 April 2013 to 5 April 2014
 Filing deadlines

•
On line 31 January 2015
•
Paper
30 September 2014
Tax payments – the nasty bit !
 31 January and 31 July (poa)
 Good cashflow initially
 Mechanics
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
Self Employed Tax & National Insurance
Tax Payments
e.g. commence as a locum in August 2014 and prepare accounts to 31
March
• Period ended 31 March 2015 locum earnings of £40k
• Year ended 31 March 2016 locum earnings of £60k
• Year ended 31 March 2017 locum earnings of £80k
• Assume all tax payable at 40%
 2014/2015
Period ended 31 March 2015
40,000 @ 40%
31 January 2016
16,000
Self Employed Tax & National Insurance
Tax Payments

2015/2016
Year ended 31 March 2016
60,000 @ 40%
31 January 2016 (2014-15)
31 January 2016
Bal 16,000
POA
8,000
24,000
31 July 2016
POA 8,000
Self Employed Tax & National Insurance

2016/2017
Year ended 31 March 2017
80,000 @ 40%
31 January 2017
Less: POA
24,000
(16,000)
8,000
2016/2017 First POA
12,000
£20,000
31 July 2017
POA
12,000
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)
Have you made claims for tax relief in relation to professional subscriptions?
Claiming for Expenses

Others
 Mobile telephone
 Internet
 Courses & training
 Postage & stationery
 Computer equipment
 Medical consumables
 Spouse salary
 Others
N.B.
Tax relief on AKT & CSA examination fees paid since 2009 may be available
Example Locum Income & Expenditure
Account
LOCUM & PRIVATE FEES INCOME & EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2014
2014
£
2013
£
INCOME
£
£
57,000
50,000
EXPENDITURE
Computer Expenses (Proportion)
40
80
1,100
300
900
1,000
1,200
980
100
80
Professional Indemnity Insurance
6,000
5,500
Professional Subscriptions
1,200
1,100
Telephone & Mobile (Proportion)
150
140
Use of House (Estimated at £5 per week)
260
260
Conferences & Courses
Legal & Professional Fees
Motor Expenses
Printing, Postage & Stationery
10,950
NET SURPLUS FOR THE YEAR
£
46,050
9,440
£
40,560
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
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)
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
NHS Pension Scheme

Officer scheme – Final salary

Practitioner Scheme – Dynamised career average earnings

2008 Scheme

2015 Scheme - More changes to come
NHS Pension Scheme

Legal requirement for GP’s to complete pension forms

Type 1 Certificate of pensionable pay – GP’s in Practice

Type 2 Certificate of pensionable pay – Salaried GP’s; Career OOHs; GP’s

Locum A & B forms. – Locum GP’s

From 1 April 2014 GP Locums may pension appraisal work via forms A & B

Form GP Solo – OOH ;GPWSI, CCG ; Ad hoc NHS income
NHS Pension Scheme

If a freelance GP locum is working through a locum agency or is trading as
a limited company they CANNOT be in the NHSPS.

If a freelance GP locum is working through a matchmaking agency they
can pension their income.

From 1 April 2013 the GP locum (14%) employer contributions have been
paid by the relevant commissioning Practice and not the CCG/LHB.

When the GP locum is paid their fee the commissioning Practice will also
pay over 14% employers contributions to the GP locum. The locum GP will
then be responsible to forward all contributions as well as pension forms A
& B.
Example Locum Invoice
CALCULATION OF INVOICE FOR LOCUM WORK
DATES : 1,2,3 7,8 April 2014
ITEM
2.5 hr surgery
Home visits
RATE
NUMBER
260
25
5
3
Sub Total
Pensionable income
£1,375.00 x
90%
SUB-TOTAL
£
1,300.00
75.00
1,375.00
A
173.25
B
1,237.50
Add : Employers pension at 14% of pensionable income
(£1237.50 x 14%)
TOTAL (sub total plus employers pension - A+B)
£1,548.25
Tiered superannuation rates
Proposed 2014/2015 Contribution rates before tax relief (gross)
Full-time pay
Contribution rate
(before tax relief)
2013/2014
(gross)
Contribution rate
(before tax relief)
2014/2015
(gross)
Contribution rate
increase 2014/2015
(percentage points)
(gross)
5%
5%
0
15,432.00 – 21,387.99
5.3%
5.6%
0.3
21,388.00 – 26,823.99
6.8%
7.1%
0.3
26,824.00 – 49,472.99
9%
9.3%
0.3
49,473.00 – 70,630.00
11.3%
12.5%
1.2
70,631.00 – 111,376.99
12.3%
13.5%
1.2
111,377.00 and over
13.3%
14.5%
1.2
<15,431.99
Tiered superannuation rates
Example 1
Pensionable Earnings
Tier rate (2014/15 Provisional rate)
£49,472
9.3%
£49,473
12.5%
£4,601
£6,184
Employee Contributions
Equates to additional contributions of £1,583
Example 2
Pensionable Earnings
Tier rate (2014/15 Provisional rate)
£70,630
12.5%
£70,631
13.5%
£8,829
£9,535
Employee Contributions
Equates to additional contributions of £706
Locum A Form
Locum B Form
Type 2 Medical Practitioner - 2013/14
Self Assessment Form
Type 2 Medical Practitioner - 2013/14
Self Assessment Form – cont’d
Remember

Ensure monthly forms are submitted

Retain copies of forms submitted

Monitor your income levels

Non Compliance
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)
Baker Tilly medical services
 Baker Tilly acts for over 350 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
Richard Apps
Partner, Medical Services
[email protected]
Charles Nicholson
Associate Director, Medical Services
[email protected]
2 Wellington Place
Leeds
LS1 4AP
Tel: 0113 2445451
3 Hardman Street
Manchester
M3 3HF
Tel: 0161 830 4000
29