Pulse: more from AISMA accountants on 2017/18 contract
February 14, 2017
Pulse: AISMA chairman comments on 2017/18 GP contract
February 10, 2017
Accountants warn GP partners to expect higher tax bills in 2018
January 31, 2017
Higher earning GP partners may have substantially higher tax bills to pay in 2018 and should start planning now. With doctors due to pay their January 2017 tax bills today, the Association of Independent Specialist Medical Accountants (AISMA) is warning GP partners to prepare for the worst this time next year when the impact of changes to the annual allowance last year will be felt for the first time.
The annual allowance is the increase in value of a GP’s pension each year before more income tax is charged. It was lowered on a sliding scale down to £10,000 for the highest earners in April 2016. For these doctors, if the growth in pension benefits exceeds the annual allowance, the excess will be taxed between 40% and 45%.
Luke Bennett, AISMA committee member and partner at accountancy firm PKF Francis Clark, said: “By our reckoning one in ten GPs will be affected and the sums involved are pretty hefty. I have been warning some of my GP clients to expect additional tax charges of over £20,000.” He continued: “Normally when you pay more tax it’s because you’ve earned more money. But there will be no more money in GPs’ pockets to pay next year’s tax bill than there was this year.”
GPs can elect for the NHS pension scheme to pay some of the tax on their behalf but maximum limits apply and many will still have to find large sums of cash to pay the tax.
Mr Bennett says his GP clients are looking at various options to cope with the financial hit in 12 months’ time. “Some are starting to save now, while others are looking at ways of lowering their income to bring the tax charge down. There’s also the option of coming out of the NHS pension scheme or dipping in and out of the scheme and putting aside the contributions to pay the tax bill when it arrives.”
He added that there are no ‘one size fits all’ solutions since all GPs will be in a different position. “It’s essential to work with a specialist accountant who can advise you on the tax position and also a financial planning adviser who has specialist knowledge of the workings of the NHS pension scheme.”
Practice Management: January 2017
January 16, 2017
Ready for more locums in your practice? In this month’s issue of Practice Management magazine, AISMA accountant Barry Rigby has an update for practice managers on how to manage locum pay, tax and pension contributions. Click here to download the full article
Pulse: Mitigating the potential risks of federating
January 3, 2017
Practice Management: Managing cash flow
December 5, 2016
In this month’s issue of Practice Management magazine, AISMA accountant Phil Harnby explains that long-term planning is key to avoiding unnecessary cash flow problems in the practice. Click here to download the full article
Practice Management: alternative income sources
October 17, 2016
With GP profits under pressure, AISMA accountant James Gransby has some advice for practice managers needing to pursue new ideas on how to maximise income for their practice. Click here to download the full article
Practice Management: Pension auto-enrolment update
September 12, 2016
All eligible UK employees now need to be included in a workplace pension. AISMA accountant Rebecca Gascoyne-Richards provides an update on how the new rules affect GP practices. Click here to download the full article
Practice Management: Funding for practice premises
August 8, 2016
With increasing pressure on primary care, many GP practices are finding that their current premises are too small or simply not fit for purpose. AISMA accountant Andrew Pow outlines premises funding issues for practices in the July/August issue of Practice Management magazine. Click here to download the full article
Financial benchmarking: how it can help your practice
August 4, 2016
How do you know if your practice is as profitable as the next one? Could you and your team improve performance? While your practice accounts will help your GP partners assess their investments in the practice, together with their taxable and pensionable profits, it’s increasingly important for this financial data to be used to plan ahead. AISMA accountant Elizabeth Lloyd explains how financial benchmarking can help your practice. Visit the Practice Index blog to read the full article.