Nottingham Tax Consultants. Tax advice for doctors.
Improve your financial health
Traditionally doctors have operated their private practices under a sole-trader arrangement. However, a lot has changed in recent times such as the new NHS pension rules, the loss of tax allowances for high earners and a lower taxation regime for limited companies. Consequently, it is likely that there is now a much more tax efficient way to structure your affairs if you are not yet using a limited company.
With careful structuring, the use of a limited company as a vehicle for your private practice can save you a surprising amount of tax. Our bespoke service is able to minimise, and in some cases completely eliminate, any negative effects from the new NHS pension rules and the loss of the personal tax allowance that you may otherwise be caught by. We may be able to save you further tax by utilising spouse exemptions and dividend exemptions. Typical savings for a doctor are £15,000-£20,000 per year compared to the old sole-trader route but can be as much as £50,000 if your earnings exceed £210,000.
Do I have to worry about VAT?
Many healthcare services are exempt from VAT, but not all. The most common line of work where VAT is relevant is medico-legal. If your income from this type of work exceeds the registration threshold (currently £83,000) you will have to register for VAT. We can deal with this and the subsequent VAT returns for you. We can often structure your affairs so that being registered will actually save you money – indeed, some doctors have voluntarily registered for VAT once we have explained the potential benefits.