For DF1, DF2 and new associate dentists
Choosing an accountant
6 things to think about
Are you coming to the end of FD1 or FD 2 and planning to start as a self-employed associate this summer? If so then you will need to think about various aspect of running your own business, not least the tax and accounting side of this.
In the UK almost anyone can offer accountancy services. So how do you select an accountant, what will they do for you and is a dental accountant the right choice for you?
The dental industry is unique and having an advisor that understands the intricacies of the dental world, can be invaluable to you throughout your careers. Any accountant will know the rates of tax and national insurance, and how to prepare a tax return. By having dental specific expertise on your side – you can take comfort in the knowledge that you are in the best possible tax position and all the dental complexities have been considered.
There are several key points in time throughout a dentist’s career where the specialist knowledge can be invaluable. So, let us take a look at these in turn.
As a foundation dentist you will be in a salaried position, with your tax and national insurance automatically deducted by your employer. This means that you have never had a requirement to complete a tax return or think about taxes. Even as a salaried dentist you are entitled to tax relief on expenses that meet HMRC’s criteria of ‘wholly, exclusively and necessarily incurred in the performance of the role’. This means you can claim for items like professional subscriptions and indemnity insurance.
As you complete your studies, many of you will become self-employed and work as a dental associate. HMRC’s guidelines on allowable expenses are widened when you become self-employed as you are allowed costs that are required for the purpose of the trade. This means that training costs, dental materials and other expenses become allowable.
PFM Dental can provide you with their associates expenses guide to help ensure you are as tax-efficient as possible.
You will also need to register with HMRC as being self-employed and start monthly record-keeping. As your tax will not be deducted monthly, you will need to grasp the tax system, and get into a routine of putting money aside each month towards your tax bill (which will include student loan repayments).
A dental specialist can help guide you through the process, register you with HMRC at the right time and even before you start work give you an idea of what tax you will need to pay and when. Just tell us how many UDA’s you are going to perform at what rate and we will do the rest.
Each year as an NHS performer you will be required to declare your NPE to ensure that your superannuation is being deducted at the correct rate. This is a technical calculation and every year we see practices that get this wrong for their associates. . An uncorrected error could mean you miss out on valuable pension or end up having to pay an unexpected one of pension contribution.
As dental specialists we can check your first (or any) payslip so you can be reassured that you practice deductions are correct. However, we do more than this: we can also check your NHS Compass declaration to make sure you are being allocated the correct superannuable earnings each year.
You might have heard the buzz around the dental world regarding HMRC’s review of the engagement status of associate dentists. In this time of uncertainty with HMRC writing to individuals, having someone in the industry to advise you will be imperative. PFM Dental work with over 800 dentists, each with a unique working pattern. This variety means that we are sufficiently well-informed to deal with any challenges from HMRC.