For many self-employed dentists, the rising costs of running a dental practice has led to greater concerns over paying their annual tax liabilities. With the 31 July self-assessment payment deadline looming, Wesleyan Bank gives the following top five tips highlight how they can ease the pressure on their finances and gain better predictability over their monthly expenditure.
Request a business health check
Specialist financial providers offer dentists free ‘business health checks’, which delve into the bigger picture surrounding both your personal finances and your business’s running costs.
The business health checks can be structured to focus on the areas that matter to you. These include, but are not limited to, offering advice on how to secure funding to grow or maintain your business, pinpointing key issues around business succession and continuity planning, as well as identifying potential tax liability savings.
Reduce your tax bill with capital allowances
Capital allowances entitle dental practices to claim a valuable source of tax relief for certain capital expenditure. Qualifying items include specialist equipment, IT and technology-related investments as well as heating, air conditioning and lighting.
For example, the Annual Investment Allowance (AIA) offers tax relief at 100% for qualifying capital equipment expenditure. The AIA enables businesses to write off the combined cost of certain assets against profits in the year of purchase, up to a value of £200,000, providing a valuable tax saving concession.
Claim all the tax breaks you are entitled to
If you are self-employed, you can claim tax allowances on expenses including professional membership fees and subscriptions (BMA, GDC etc), tools and specialist dental equipment, as well as sales and marketing promotional materials. In addition, you can claim business mileage or fuel, excluding commuting to your normal place of work.
Appoint an experienced accountant
Specialist dental accountants help dentists to more easily understand and plan for their tax liabilities when embarking on self-employment. This extends to advising when you need to pay tax to ensure you don’t miss any deadlines, what financial records you need to keep and ensuring you claim all the tax reliefs available.
Spread the cost of your tax liabilities
Alternative finance providers offer funding for tax bills to enable dentists to preserve cash flow without compromising their existing banking lines. Unsecured loan facilities allow you to spread the cost of tax liabilities in a flexible way, over a term of six or 12 months.
Busy professionals also have the convenience of being able to apply for tax funding online in minutes through user-friendly digital services.