Dental and Medical Financial Services explains how you could make some last-minute tax savings.
The 2018-2019 tax year is fast approaching, and whether you are a self-employed or employed dental professional, you should make sure you have taken advantage of all your tax saving opportunities.
It’s not too late
You may think that we are too close to the deadline to have enough time to make a difference this year – but it is worth a little effort to explore all your tax relief options. After all, we would all be happy to save a little money, wouldn’t we?
Here is guide to some of the considerations you should be making before 5 April
Pension contributions – one of the easiest ways to save on tax is to make full use of your pension allowance. For basic rate tax payers, this is £40,000 per tax year, and you receive 20% tax relief on your payments. For those with an income over a certain threshold, this allowance is decreased. Find out more about the tapered annual allowance.
ISA allowance – for the 2018-19 tax year, the investment allowance across all types of ISA is £20,000. This means that you don’t pay tax on any interest or dividends earned on this. You can put your allowance into one type of ISA, or spread it across a few different options. Your children can also invest up to £4,260 per year of their own tax free allowance into a Junior ISA.
Other tax favourable investments – you should speak to your financial adviser about other tax deductible investments. For example, Enterprise Investment Schemes (EISs), Seed Enterprise Investment Schemes (SEISs) and Venture Capital Trusts (VCTs). Remember that these can be risky options.
Taxable expenses – as a self-employed dental professional there are a plethora of tax reliefs that you might be eligible for. Make sure that you make full use of these to reduce your tax bill. Speak to your account about what you can claim for.
Business and property owners – you can increase your tax relief through claiming your rental property expenses, take advantage of the £11,300 Capital Gains Tax allowance and make sure that you are making use of the new ‘residence nil-rate band’ (RNRB).
Tax deductible equipment – as a practice owner, you may be considering investing in new equipment for your business. There are tax savings available as part of your Annual Investment Allowance (AIA) if you do this, which will help recoup some of the outlay required.
Personal allowances – if your spouse or registered civil partner is not using their full income personal allowance, they can transfer this to you to reduce your tax burden. For this year, the allowance is £11,850.
Carry forward – if you have not used your allowances from previous tax years, in some cases you can carry these forward to take advantage of them this year. For example, your £3,000 charitable donations allowance can be carried forward one tax year.
Get specialist financial advice
As a team of independent financial advisers for the healthcare industry, we specialise in helping dental professionals like you to choose the right investments. We work with your accountant to ensure your choices suit your financial situation. Contact us today for advice on investments for tax planning.
Dental and Medical Financial Services has been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.
For more information call 01403 780 770.
