Paying too much tax on your practice?
Nine out of ten dental practices in the UK could be owed considerable tax rebates due to unclaimed tax relief relating to their premises, which could also be used to reduce tax bills in the future.
That's according to research carried out by property tax specialists MoneyBee Tax.
The unclaimed tax relief, so-called capital allowances, applies to money spent buying, building or refurbishing dental practice, relating specifically to the fixtures and fittings within the premises.
Some dentists successfully claim basic allowances for obvious items such as dental chairs and computer equipment as part of their tax return every year. However, items that are often overlooked that attract significant capital allowances include waiting room fixtures, dental cabinetry, lighting, air-conditioning, plumbing and other mechanical and electrical installations.
These tax allowances can be very valuable – MoneyBee Tax estimates that for every £100,000 a business spends on premises, on average, capital allowances can be claimed on 30% of this – but in certain circumstances this could be as high as 90%.
Andrew Reid of MoneyBeeTax says: 'The value of capital allowances will vary from practice to practice but we rarely come across a case where a business couldn’t save money. Importantly, even if you set up your practice years ago, a claim for capital allowances can still be made.’
To find out if you could be due a tax rebate visit www.moneybeetax.com and check out the capital allowances calculator to get an immediate estimate of how much you could be owed.
Andrew adds: 'We recently worked with a dental partnership with two surgeries in greater Edinburgh. Both surgeries were purchased within the last ten years for a total of £450,000, with a further £80,000 being spent refurbishing and equipping them. Unclaimed capital allowances of £175,000 were identified, giving the partners a tax saving of £70k, which has allowed them to hire a new hygienist as part of the team.’
MoneyBee Tax are warning that new ‘use it or lose it’ legislation becomes law from April 2014, so dentists need to act now to claim capital allowances – if not they risk missing out on these highly valuable tax reliefs for ever more.
*The study looked at a sample of over 2000 engagements with MoneyBeeTax’s parent company Capitus Group. In almost 100% of cases, unused capital allowances were identified which resulted in a reduction of the clients tax liability.