This was certainly the case for a client of AISMA accountants Moore and Smalley LLP. On taking over the financial affairs of a hospital consultant employed by the NHS who also worked privately, Moore and Smalley uncovered a catalogue of errors over the previous six years and found that the doctor had overpaid National Insurance contributions that, with interest, amounted to more than £5,000.
Moore and Smalley began by reviewing the doctor’s 2007/8 tax return, which had been submitted by the previous accountant. This revealed that the full rate of National Insurance was being paid on both the doctor’s employed and self-employed earnings. David Walker, tax specialist at Moore and Smalley, explains: “If a doctor pays the full rate of National Insurance for employed income, then the rate paid on any self-employed income, in this case the doctor’s private fee income, should be reduced. Consequently, this doctor was paying more than was needed.”
After obtaining information for the previous six tax years Moore and Smalley calculated the refunds due and made an application to HM Revenue & Customs on the doctor’s behalf. A refund of £5,082.77, including interest, was paid.
David Walker continues: “We come across similar cases frequently since it can affect doctors working as hospital consultants and also salaried GPs who earn non-NHS income. With this particular case we not only obtained a refund for National Insurance contributions but also found that we could reduce the doctor’s tax payments due for 2007/8 and subsequent years.”
Doctor: NHS hospital consultant with some private fee income
AISMA accountant: Moore and Smalley CA Ltd
Theme: £5,000 refund obtained for overpayment of National Insurance contributions
Detail: Full rate of National Insurance paid on both employed and self-employed income resulting in overpayment over six years
Action taken: Tax returns examined, refund calculated and application to HMRC made on doctor’s behalf