Personal Finance for GPs Jenny Stone, ACA Ramsay Brown and Partners Ramsay House 18 Vera Avenue London N21 1RB Tel:

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 – 31 st January & 31 st July Three instalments for a tax year More expenses can be claimed for tax relief Tax return to be submitted

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 6 th April to following 5 th April ●Greater onus on taxpayer

Example of tax payments Tax liability for 2008/09 £30, st January 2010 Balance for 2008/09 £30,000 1 st Pymt on account 2009/10£15,000 1 Total due£45, st July nd Pymt on account 2009/10£15,000 2 Tax liability for 2009/10 £40, st January 2011 Balance for 2009/10 £10, st Pymt on account 2010/11£20,000 Total due£30, st July nd Pymt on account 2010/11£20,000

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 6 th April 2009

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

Dates and Penalties ●Tax return issued 6th April 2009 for tax year 2008/09 ●Deadlines Filing Paper Tax return – 31 st October 2009 Filing online – 31 st 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

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, % on £19,683 - £65, % on £65,003 - £102, % 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

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!!

QUESTIONS?