1. www.bakertilly.co.uk Financial Planning & NHS Pension Scheme Calderdale Royal Hospital 8 April 2014

2. Financial planning Self employed tax and national insurance Expense claims GP Partners NHS Pension Scheme Our clients Baker Tilly medical services

3. 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

4. Self Employed Tax & National Insurance Tax Return 2013/2014 covers 6 April 2013 to 5 April 2014 Filing deadlines On line31 January 2015 Paper30 September 2014 Tax payments – the nasty bit ! 31 January and 31 July (poa) Good cashflow initially Mechanics

5. 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. ISAs/Premium Bonds Please note self employed earnings should be declared when work undertaken rather than when monies received

6. 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% 2014/2015Period ended 31 March 2015 40,000 @ 40% 31 January 201616,000

7. Self Employed Tax & National Insurance Tax Payments 2015/2016Year ended 31 March 2016 60,000 @ 40% 31 January 2016 (2014-15)Bal 16,000 31 January 2016POA 8,000 24,000 31 July 2016 POA 8,000

8. Self Employed Tax & National Insurance 2016/2017Year ended 31 March 2017 80,000 @ 40% 31 January 201724,000 Less: POA(16,000) 8,000 2016/2017 First POA 12,000 £20,000 31 July 2017 POA 12,000

9. 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?

10. 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

11. Example Locum Income & Expenditure Account LOCUM & PRIVATE FEES INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2014 20142013 ££££ INCOME 57,000 50,000 EXPENDITURE Computer Expenses (Proportion) 40 80 Conferences & Courses 1,100 300 Legal & Professional Fees 900 1,000 Motor Expenses 1,200 980 Printing, Postage & Stationery 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 10,950 9,440 NET SURPLUS FOR THE YEAR £ 46,050 £ 40,560

12. 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

13. 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)

14. 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

16. NHS Pension Scheme Officer scheme – Final salary Practitioner Scheme – Dynamised career average earnings 2008 Scheme 2015 Scheme - More changes to come

17. NHS Pension Scheme Legal requirement for GPs to complete pension forms Type 1 Certificate of pensionable pay – GPs in Practice Type 2 Certificate of pensionable pay – Salaried GPs; Career OOHs; GPs Locum A & B forms. – Locum GPs From 1 April 2014 GP Locums may pension appraisal work via forms A & B Form GP Solo – OOH ;GPWSI, CCG ; Ad hoc NHS income

18. 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.

19. Example Locum Invoice CALCULATION OF INVOICE FOR LOCUM WORK DATES : 1,2,3 7,8 April 2014 ITEMRATENUMBERSUB-TOTAL £ 2.5 hr surgery26051,300.00 Home visits25375.00 Sub Total1,375.00 A Pensionable income £1,375.00 x 90%1,237.50 Add : Employers pension at 14% of pensionable income173.25 B (£1237.50 x 14%) TOTAL (sub total plus employers pension - A+B)£1,548.25

20. Tiered superannuation rates Proposed 2014/2015 Contribution rates before tax relief (gross) Full-time payContribution rate (before tax relief) 2013/2014 (gross) Contribution rate (before tax relief) 2014/2015 (gross) Contribution rate increase 2014/2015 (percentage points) (gross) <15,431.995% 0 15,432.00 – 21,387.995.3%5.6%0.3 21,388.00 – 26,823.996.8%7.1%0.3 26,824.00 – 49,472.999%9.3%0.3 49,473.00 – 70,630.0011.3%12.5%1.2 70,631.00 – 111,376.9912.3%13.5%1.2 111,377.00 and over13.3%14.5%1.2

21. Tiered superannuation rates Example 1 Pensionable Earnings£49,472£49,473 Tier rate (2014/15 Provisional rate)9.3%12.5% Employee Contributions£4,601£6,184 Equates to additional contributions of £1,583 Example 2 Pensionable Earnings£70,630£70,631 Tier rate (2014/15 Provisional rate)12.5%13.5% Employee Contributions£8,829£9,535 Equates to additional contributions of £706

22. Locum A Form

23. Locum B Form

24. Type 2 Medical Practitioner - 2013/14 Self Assessment Form

25. Type 2 Medical Practitioner - 2013/14 Self Assessment Form – contd

26. Remember Ensure monthly forms are submitted Retain copies of forms submitted Monitor your income levels Non Compliance

27. 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)

28. 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

29. 29 Richard AppsCharles Nicholson Partner, Medical ServicesAssociate Director, Medical Services richard.apps@bakertilly.co.ukcharles.nicholson@bakertilly.co.uk 2 Wellington Place3 Hardman Street LeedsManchester LS1 4APM3 3HF Tel: 0113 2445451Tel: 0161 830 4000