Category: Accountancy and Tax

Explore expert accountancy and tax solutions at Samera. Our professionals offer comprehensive financial guidance and tax strategies.

Ignoring Cash Flow Issues Amidst Rising Costs 

Posted on by Arun Mehra

Dentists and The Peril of Financial Avoidance

In the realm of dentistry, where precision, care, and attention to detail reign supreme, a parallel demand for financial diligence is often overlooked or evaded. Dentists, while dedicated to their craft, can sometimes find themselves navigating turbulent financial waters, especially when faced with challenges like escalating interest rates and mounting operational costs. However, the tendency to overlook or disregard cash flow issues could be likened to the age-old idiom of ‘burying one’s head in the sand,’ ultimately exacerbating problems rather than resolving them. 

In recent times, the dental industry, like many others, has encountered the impact of higher interest rates. The ramifications of increased borrowing costs can significantly impede the financial stability of dental practices. Whether financing new equipment, expanding the clinic, or managing existing debts, the dentistry profession, like any small business, is vulnerable to the ebb and flow of interest rates. With each uptick, the strain on cash flow intensifies, making it crucial for dentists to proactively address these challenges. 

Check out our article Have the interest rate peaked at 4?

Furthermore, operational expenses for dental practices continue to surge. From the cost of state-of-the-art equipment to escalating overheads and staffing expenses, dentists are facing an uphill battle to maintain profitability. The convergence of these factors requires a pragmatic and strategic approach to financial management, yet it’s not uncommon for some practitioners to avoid addressing these issues head-on. 

The analogy of ‘burying one’s head in the sand’ encapsulates the perilous consequence of ignoring financial challenges. Instead of confronting the root causes of cash flow constraints, some dentists might adopt a passive stance, hoping the issues will resolve themselves. This approach, however, often leads to a snowball effect, exacerbating financial distress and limiting the ability to invest in the practice’s growth and development. 

Check out our article on how should a dental practice organize its finances.

To mitigate these challenges, dentists must prioritize financial literacy and prudent fiscal planning. Implementing a comprehensive cash flow management strategy becomes imperative. This may involve reevaluating expenditures, renegotiating terms with suppliers, exploring alternative financing options, or seeking professional financial guidance tailored to the unique needs of a dental practice. 

Moreover, embracing technological advancements and leveraging digital solutions can streamline administrative tasks, optimize operations, and potentially reduce costs. Embracing innovation not only enhances efficiency but also positions the practice for long-term sustainability in an evolving landscape. 

Collaboration within the dental community can also be a valuable resource. Engaging in forums, networking events, or professional associations can provide insights, shared experiences, and innovative solutions to navigate financial challenges collectively. 

Ultimately, acknowledging and actively addressing cash flow issues, particularly amidst rising interest rates and mounting costs, is pivotal for the financial health and longevity of dental practices. Evading or neglecting these challenges can lead to a deeper financial quagmire, hindering the ability to provide quality care and stifling the potential for growth and innovation within the profession. 

In conclusion, dentists must resist the temptation to ignore cash flow issues and higher costs resulting from increased interest rates. By confronting these challenges head-on through prudent financial management, proactive strategies, and a willingness to adapt, dental practitioners can fortify their practices, ensuring sustained success amidst a dynamic and challenging economic environment.

Check out our article on 5 quick tips when buying a dental practice. 

If you have concerns contact us at Samera and let us review your position and examine what can be done to assist. 

4 Tools to create a scalable business in 2022

Posted on by Chris O'Shea

Building a business is difficult and there are a plethora of tools that claim to make your life easier. Some do, others make it more complicated.

But when you want to scale your business, things get even harder, and invariably issues arise. I have highlighted, not in any particular order, 4 business tools that made a significantly positive difference to our businesses in 2021. I feel these tools are just as, or even more, important in 2022. Some are free, and others are paid, but check them out.

Website page speed

Ignore this at your peril! Whilst your website is the shop window to your business, it’s so essential that it provides the user experience that a website visitor will desire.

Therefore, the speed of website loading has to be at the top of your list to attract patients and customers. If it’s slow the bounce rate will rise and your potential new patient may go somewhere else.

So how do you know the speed of a website? Google have a free tool which will basically tell you the speed of a page – and then breaks it down what your web development team will need to do.

Click here to check the speed or your website.

If your score is highlighted red, tell your development team, and if they can’t change it, you need a new team!

Content is king for SEO

We all know content is king already, but none more so than in the written form. For the last 2 years we have had a content writer full time in our team, writing about all aspects of the various services we provide.

Google likes this, and coupled with a fast page speed (see above) your well-written, relevant content will greatly help your SEO and get you the customers you desire.

As for tools to use, https://ahrefs.com/ will help you figure what keywords you should be trying to rank for and then what your position is. 

Again, we have been using this tool a couple of years and is a no brainer tool if you want to dominate your SEO in your markets. 

Automating payroll with Brightpay

Payroll has been one of those services we have provided to clients and to be honest struggled getting it slick and fast for many years. The software has been cumbersome until we started using and rolling out Brightpay.

It’s fast, very easy to use for both employees and employers and has a clear audit trail. If you are thinking about changing how you do your payroll, whether you do it in-house, or outsource it to the Samera payroll bureau team, you won’t be going wrong with Brightpay.

Xero and Hubdoc for book-keeping

Ok, as a firm of accountants, we may be biassed, but the Xero and Hubdoc combination makes life easier for any business, if it is integrated well into a business. It saves time, helps you become paperless and can provide you the management information you require. We have been using this for a lot longer than one year, but it’s still a cracking piece of software.

As with any tool, especially with book-keeping, it’s only as good as the users who are using it. It can go wrong if not organised, but if set up from day one, it can really be a game changer in your business.

Get in touch if you are seeking to implement Xero into your business.

Grow Your Dental Practice with Samera

Join the Samera Alliance buying group today for free to save money on your consumables and assets, increase your profits and grow your dental practice.

You’ll get access to exclusive discounts on the consumables, products and equipment you need to build and grow your dental practice. You’ll also get exclusive discounts from our Alliance Partners, covering everything from HR, IT and legal services to utilities, compliance and dental technology.

Join for free. Save money. Grow your dental practice.

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More on Growing a Dental Practice

For more information on growing a dental practice, check out the articles and webinars in our Learning Centre, like our guide on How to Grow a Dental Practice.

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Are EBITDA multiples in the UK Dental Market going to grow over the next few years?

Posted on by Arun Mehra

I was recently asked this question by a group practice owner, so I thought I would throw my thoughts into the ring.

Over the last few years a lot of the growth in Dental practice values and hence EBITDA multiples has been as a result of increasing amounts of Private Equity (PE) money entering the market.

They have investors cash and want to deploy this to buy and build a dental group, as they have seen some successful exits previously. 

But surely there has to come a point when this will stop or pause at least?

Many of the large UK dental corporates are PE backed and as far as I can remember many of the larger groups have always been discussing a flotation, but none have successfully pulled this off. Failing that, PE investors restructure their holdings and then sell their shareholdings to other PE houses usually making a profit on their original investment. The new owners, then hope they can grow it further and then get this to flotation, but realising this is not going to happen with a suitably sized financial sponsor to get it listed, so they either end up holding their investment or try to -rejig to make it attractive to another PE investor.

Click here to read our article on Dentist and Dental Associate Expenses Guide

In my opinion, if a successful float can happen, then perhaps the value multiples will rise as more PE will enter the market and then believe that dentistry is the holy grail to growing their investments.

Here in the UK, most of the groups have a large NHS bias, but the question has to be will the NHS change the contract and if it does how will it impact such large groups? With Covid, if I were a betting man, I think the contract will change, but I think many dentists are praying this won’t happen – but who knows?

There is no doubt a shortage of quality dental practices to buy in the main cities across the UK, hence values remain strong, as many younger dentists have entered the profession with a view to owning their own dental practice, but not being able to buy one (either through lack of availability or insufficient funds). So now we are seeing unprecedented demand for people to start their own private dental squat.

It’s an interesting time in UK dentistry currently, and whilst a group could yield more than 10x EBITDA if selling, sometimes the individual parts could be worth more than the whole – so you could sell individual sites to single operators at a stronger premium as they have money saved to get on the ladder (perhaps with the help of their mum and dad).

As long as we don’t have any further major global pandemics, I do think values will remain resilient as demand does currently outstrip supply for quality practices in urban locations.

As for the EBITDA multiple rising higher over the next years than it is currently, I wouldn’t bet against it, but I think we need to see a successful flotation to see multiples move to a much higher level.

Watch this space!

Click here to read our articles on Samera Learning Centre.

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult
Dental Accounts & tax

Dental Accounts & Tax: Further Information

For more articles, webinars and blogs on dental accounts check out the dental accountancy section of our Learning Centre and follow us on YouTube, Facebook, LinkedIn and Instagram.

The Game Changer in your Practice Accounts

Posted on by Arun Mehra

Make one payment to all your 30+ suppliers each month and save hours!

Ok, I maybe sounding like a nerdy accountant, and think this is exciting for accounting, but to be honest it will save you a lot of time and money, if you commit and get your affairs streamlined onto Xero.

For the last 12 months, we have been testing using Xero WITH Wise (formerly known as Transferwise), in order to make payments to suppliers.

Click here to watch our webinar on Navigating Your Dental Practice Finance Future.

Now, I only need to make one payment per month to all our 30+ suppliers, this takes a few minutes, rather than having to make individual payments to each supplier which can take hours.

The key is to be using Hubdoc for scanning all your invoices, then this is processed by our book-keeping team into Xero, with all accounts reconciled and then payments are made via WISE who manage the whole payment process.

Click here to read our blog on How to finance a dental practice.

And yes, I just make one payment each month to all our 30+ suppliers.

This saves me many hours each month, streamlines the whole process and allows us to focus our efforts on aspects of the business that require greater focus and time.

Click here to read our articles Samera.

Further Information

For further information this watch the video on the following page:

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Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult
Dental Accounts & tax

Dental Accounts & Tax: Further Information

For more articles, webinars and blogs on dental accounts check out the dental accountancy section of our Learning Centre and follow us on YouTube, Facebook, LinkedIn and Instagram.

5 Tax Tips for Dentists and Doctors in May 2021

Posted on by Arun Mehra

As we are moving further into the 2021-22 tax year we are starting to see the light at the end of the pandemic tunnel, which means now is the best time for you to review and refresh your financial affairs. Now is the time for business owners like yourself to maximise the tax benefits available to you for further capital investment and innovation, and right here is the perfect place for you to start. Here are Samera’s Tax Top Tips for Dentists and Doctors. Our tips offer valuable insight and inspiration for you and your business to grow. 

1. Stamp Duty Holiday 

The stamp duty holiday extension has been confirmed and will apply to all residential property buyers. This means that you will not have to pay stamp duty on the first £500,000 of your property if you complete the transfer legally before 30 June 2021. From 1 July 2021 to 30 September 2021 the nil band will be £250,000. The nil rate band will then return on 1 October 2021 to the standard amount of £125,000.

If you are in the midst of transferring or acquiring a residential property, or even considering it, due to this stamp duty holiday you may want to accelerate matters before the stamp duty returns and your potential savings wither away. Accelerating your purchases or transfers will enable you to achieve the most stamp duty savings. Get in touch with our advisors for further information.

2. Super deduction and the SR Allowance

The super deductions and special rate first year allowance (SR allowance) temporarily increases reliefs for companies within any sector on qualifying expenditure on plant or machinery from 1 April 2021 to 31 March 2023. The super deduction introduced in 2021 was the biggest business tax cut in modern British history. This recent capital allowance and the SR allowance gives companies up to 130% tax relief on the qualifying cost of the capital investment.  These allowances are only available for companies, not for any self-employed businesses or partnerships.

Both these enhanced capital allowances are in addition to the existing ongoing Annual Investment Allowance which already gives relief for costs of qualifying plant and machinery up to £1M in the tax year of purchase. 

It is important to note that certain assets do not qualify for relief such as cars or second-hand equipment but the majority of brand-new plant machinery and equipment for use in your trade is likely to qualify. These are reliefs where the date of expenditure is important for the assets to qualify so businesses will need to maintain records of dates of acquisition especially for larger projects that span between the allotted dates (1 April 2021-1 April 2023).

Click here to find out more about the superdeduction.

3. Capital Taxes Planning

Although many rumours have been floating around leading up to the March Budget, no changes have been made. However, it is the view amongst many of our tax professionals that the increase of tax with Capital Gains Tax (CGT) is hanging in the balance and is only a matter of time before it will be increased. 

If you are currently considering whether to transfer or sell any assets, it may be a good idea for you to get ahead and start to accelerate such sales and transfers in light of potential CGT changes that are imminently forthcoming.

4. Use of a Family Trust

This tip is particularly useful if you are looking to undertake asset protection or Inheritance Tax Planning (IHT) – otherwise, at the event of your death, HMRC could be entitled to IHT at the rate of 40% of your assets. Inheritance tax alone raised a record of £4.9bn in the last financial year.

You can control a family trust by yourself and it can hold assets for any of your family members including your children with distributions purely made at your discretion. Doing this can remove the value out of your IHT estate therefore, reducing your estate to a more manageable value. Your estate includes everything you own and the trust can help you keep a lump sum outside of your survivor’s estate to ensure it is not subject to IHT. The use of a trust could also protect your family legacy in various ways. 

Certain assets are able to qualify for 100% relief from IHT upon transfer into trust. If you have a very large and complicated estate, the sooner you start planning, the better. An efficient IHT plan involves gifting assets during your lifetime instead of one large trust at the end. Each person can generally transfer upto £325,000 into trust without incurring any tax charges upon entry. 

5. Research and Development 

The Research and Development tax credit scheme is one that countless companies are still not making use of. This scheme is the main source of government support in the UK for innovative companies. If you can demonstrate that your expenditures went towards research and development costs (by definition by HMRC of what expenditure you can claim), then you will be able to claim on it. Many eligible businesses can claim benefit from additional tax relief of up to £24.70 for every £100 of qualifying expenditure. There is now no minimum expenditure on qualifying for R&D required to make a claim for tax credit. 

If you have used any sort of science or technology or used a particular service for a project or a problem in your business that needed specialist help to fix, you may have a potential claim. If you are unsure whether your project might qualify for this valuable relief, get in touch with one of our professional advisors. 

Click here to read our article on Dentist and Dental Associate Expenses Guide

Book a Consultation

To find out more about your tax options and what Samera can do to help you, book a virtual consultation with one of the Samera Finance team.

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Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

Book a consult
Dental Accounts & tax

Dental Accounts & Tax: Further Information

For more articles, webinars and blogs on dental accounts check out the dental accountancy section of our Learning Centre and follow us on YouTube, Facebook, LinkedIn and Instagram.

Can You Swap Shares Without Any Tax Charges?

Posted on by Chris O'Shea

Share for share exchanges are very common and are used for various commercial reorganisations. These exchanges often occur when forming new holding companies in order to transfer assets out of the original company.

In order to ensure the transaction is tax neutral and does not succumb to any capital gains tax, stamp duty or income tax, these exchanges need serious consideration and thought, you will often need experienced professionals like Samera to help you through the process. 

Share For Share Exchange 

A share for share exchange is when a company transfers shares to someone in exchange for shares in another company. These exchanges often occur when forming new holding companies in order to transfer assets out of the original company. New shareholders can be introduced or the shareholders can be the same in the new and old companies.

How Our Qualified Experts Can Help You

  • We specialise in helping private companies, private practices, directors and shareholders. 
  • Not only can we advise you what to do but we have also seen many before you make countless mistakes that you can avoid.
  • We handle new company holdings and de-merges.
  • We also deal with shareholder resolutions and we can draft the agreements necessary to obtain the HMRC tax clearances, working alongside specialist solicitors

What You Need for a Share for Share Exchange 

There are a few things that are mandatory for a successful exchange, including an exact time frame, a qualified tax advisor as well as the following:

Shareholder Approval 

It is mandatory for you to get the approval for the transaction from your shareholder for this exchange to proceed. This does not have to be done by you completely, the team here at Samera will be able manage any compliance issues including board approval and shareholder resolutions. 

Shareholder Considerations

Although the shareholders do not receive any cash, HMRC will look to subject the share transfer to tax. Regardless of this, there are a number of legitimate tax legislation reliefs which legally enable shareholders to minimise any liability to tax or defer any tax until a physical sale of the shares occurs. 

Documentation

There is a lot of documentation that is accompanied with these types of exchanges that can put people off but thankfully we can sort a lot of that out for you, leaving you to focus on the things that really matter.

We handle a variety of aspects of the exchange including:

  • The revised articles or shareholders’ agreement.
  • The clearance application required from HMRC.
  • Shareholder resolutions.
  • Stamping documentation.
  • Dealing with HMRC, including reporting and payment of any taxes 
  • The consultation with any employees affected as a result of the reorganisation. 

Execution of Share for Share Exchanges 

The uses of share for share exchanges are extensive enough to cover various situations. If this is the path you decided is best for you and your business, we have compiled a set of necessary background considerations. 

Share for Share Commercial Exchanges 

In our extensive experience here are the most common scenarios of share for share exchanges we have come across:

  • Creating distributable reserves.
  • Restructuring and streamlining ownerships.
  • Managing the planning of succession.
  • Mediating and settling shareholder disputes.
  • Ring fencing liabilities.
    (This scenario is particularly popular within the tech industry)

Approaching Share for Share Exchanges 

If this service looks like something that would interest you, your shareholders or will benefit your business, get in touch with our in house experts here at Samera. The team will happily guide you and offer you expert advice and tips that aid this process. This does not have to be stressful and expensive, the structure of share for share exchanges can be very flexible. The approach and structure for your exchange will be heavily dependent on the circumstances. 

Scheme of Arrangement

A scheme of arrangement involves the process of a court cancelling an existing company’s entire issued ordinary share capital. Due to the court process, schemes of arrangement are not very common. 

Share for Share Exchange FAQ’s

These questions are very common and need answering before implementing the share for share exchange. 

Is Business Assets Disposal Relief Preserved?

During a share for share exchange, you may lose Business Assets Disposal Relief / entrepreneurs’ relief if there is a future disposal of the holding company’s shares. However, we have compiled a few ways that you can preserve your entrepreneurs’ relief.

Your can preserve your Business Assets Disposal Relief if:

– The company is a holding company of a trading company.

– The shares before the exchange have been held for at least 12 months and represent 5% of the new holding company’s issued share capital.

What is the Position for Option Holders?

Share plan documentation and plan rules are absolutely vital when addressing what happens to share rights of option holders. Without this being concrete before the exchange, the scheme of arrangement or share for share exchange may unintentionally trigger the early vesting or exercise of rights.

You need to review employee share option plans before beginning to implement the share for share exchange to eradicate any implications that may arise.

Is Stamp Duty Payable?

Stamp duty exemption on a qualifying share for share exchange only applies in certain cases, otherwise stamp duty is payable by the new holding company at a 0.5% rate. 

Usually HMRC offer a stamp duty relief for the new holding company when: 

  • The new holding company acquired all, not just some, of the existing company’s issued share capital.
  • The consideration to the existing shareholders is the granting of shares in the new holding company.
  • The shareholders of the existing company acquire the same percentage and class of shares in the new holding company following completion of the exchange.
  • The share for share exchange is for commercial reasons and not for tax avoidance.

Should the shareholders complete a hold over elections?

Depending on your personal circumstance, we may recommend the use of hold over elections.

A hold over election defers a charge to capital gains tax which may arise as part of the share for share exchange until the shares are completely disposed of and proceeds are received. 

Hold over elections also need to be reported to HMRC in order to be as effective and binding as possible.

Impact for SEIS and EIS investors under the share for share exchange

In most share for share exchanges, EIS shareholders lose their tax reliefs on disposal within three years of their acquisition. When shareholders swap shares, the shares end up holding in a completely different company, which is why share for share is considered as a disposal. However, HMRC will not consider the shares ‘disposed’ after they are transferred, which may preserve income tax reliefs in certain situations.

These situations include:

You obtain HMRC clearance in advance.

The new holding company acquires all, not just some, of the existing company’s issued share capital under the scheme of arrangement or on a share for share exchange.
The only issued shares in the new holding company are owned by the subscribers.

Can a clearance as to tax neutrality be obtained from HMRC?

You can apply to HMRC for a tax clearance as there are no capital gains tax arising when shareholders swap shares in one company to another company. The clearance will also be able to confirm that there is no income tax liability that your company will have to pay. 

Contact us for more information 

If you are looking for someone to help your share for share exchange proceed as smoothly as possible, then please get in touch with our experts here at Samera Business advisors. Our team will happily guide you through the process, take care of the due diligence and HMRC communication and can make the process of your share exchange as seamless as possible. 

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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What Does the Super-Deduction Mean for Dentists?

Posted on by Arun Mehra

From 1 April 2021 until 31 March 2023, any businesses investing in qualifying new plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying assets and machinery investments
  • a 50% first-year allowance for qualifying special rate assets

The biggest business tax cut in modern British History

This super-deduction allows companies to cut their tax bill by up to 25p for every £1 they invest. With this scheme in place, companies are expected to benefit to the tune of £25 billion over the next two years. As the pandemic has released many economic shocks throughout the UK accompanied by much uncertainty, this super-deduction tax relief will encourage many businesses to spur investments that will help them grow and get back on track. However, the deduction will only apply to “companies investing in qualifying new plant and machinery assets” rather than intangible assets.

The super-deduction allows any limited business to deduct the full value of qualifying assets from profits before tax. Rather than over several years, the full tax relief is received the same year the assets are purchased, therefore reducing your tax liability. This scheme will provide significantly faster tax relief for investments up to £1 million, further helping businesses expand, invest and grow. 

Corporation tax is a tax on profits only, not turnover. Therefore, it is only a tax on businesses that are thriving. Although many businesses have struggled during the rise of COVID-19, many businesses have also had a lot of support from the government over the last year, as the government’s relief measures have meant that companies haven’t had to draw from their own reserves. and there will be more businesses statistically thriving than a lot of people may realise. 

The super-deduction will end in 2023, which means companies have two years to take advantage of this scheme before the super-deduction window of opportunity slams shut. After march 2023, corporation tax will rise to 25%, so the government can begin to earn back some of the money that was spent during the height of the pandemic. Rishi Sunak explained how the increase of corporation tax is “fair and necessary” in order for businesses to contribute to the UK’s recovery due to how much support they received throughout the pandemic. 

Click here to read our articles on Samera Learning centre.

Example Super-Deduction

Below you can find an example of how this super-deduction can benefit your dental practice. In this example, we take a look at the difference in tax savings when a sample dental practice invest in inventory on or before 31st March 2021 compared to on or after 1st April 2021.

Date of Purchase31st March 20211st April 2021
Cost£2.5mil£2.5mil
Inventory allowances:
£1mil at 100%£1mil
£1.5mil at 18%£270K
£2.5mil at 130%£3.25mil
Total allowances available£1.27mil£3.25mil
Corporation tax benefit at 19%£241.3K£617.5K
Tax saving£376.2K

Contact Our Asset Finance Team

Before this amazing tax opportunity ends, we urge businesses, especially dental practices to increase your investments while you get the 130% tax relief. Two years will fly by quicker than you know. By then the tax relief door will be slammed shut and corporation tax will increase. The benefits to your business will be endless. If you are interested in investing in assets for your business with the 130% tax relief, get in touch with our in house experts that can help you with the asset finance you may need. The team here will happily guide you through the process and offer advice and tips that will be integral for your business to thrive during this opportune moment. 

Click here to find out more about our Asset Finance services.

Commercial Loans for Healthcare Businesses

We’ve been helping to fund the future of British healthcare businesses for over 20 years and our team are made up of former bankers with decades of experience in the UK’s healthcare lending sector.

You can find out more about working with Samera and the financial services we offer by booking a free consultation with one of the Samera team at a time that suits you (including evenings) or by reading more about our financial services at the links below.

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Financial Services

For more information on raising finance for your healthcare business, including more articles, videos and webinars check out our Learning Centre here, full of articles and webinars like our How to Guide on Financing a Dental Practice.

For all our previous webinars and video updates, subscribe to our YouTube channel and follow us on Facebook, LinkedIn and Instagram.

2021 Year End Tax Planning – Can you become an ISA Millionaire?

Posted on by Arun Mehra

It’s that time of year again when one needs to consider all their tax saving options.

In truth, there are maybe two major things you need to be considering, ISA and pension contributions.

If you have not contributed to either of these, then it’s definitely worth considering. My personal favourites are ISA’s as you can still have an instant access to the cash, yet income and capital growth is tax free.

If you invest wisely, it’s possible to build a very large ISA holding which you have not paid any tax on at all – on the income or the capital growth. Your goal should be to build a large ISA holding and if you start early in your career, it’s pretty likely you can become an ISA millionaire!

Don’t forget about Junior ISA’s too

In addition, if you have children, make sure you are using their junior ISA allowances too. Currently, you can invest up to £9000 tax free into a junior ISA – again a no-brainer if you are thinking of saving for their futures.

Of course, pensions have the benefit of providing tax relief but you cannot access the funds until 55.

Both offer excellent options to be tax efficient, so if you have not used your allowances this year and have cash to invest, start with either (or both) of these two options!

Summary of details below:

ISA v pensions-
Benefits at a glance 		ISAPension
Can I have instance access?

Yes
No access before age 55 unless due to severe ill health or protected retirement age
How much can I pay in?

£20,000 each tax year£3,600 gross or 100% of net relevant earnings (whichever is higher) subject to annual allowance limits
(currently £40,000 but can be lower for high earners)
What is the tax treatment in the fund?

Tax-efficient growth Tax-efficient growth
What tax relief is available on your contributions?

NoneImmediate 20% available

Higher/additional rate taxpayers can claim further relief via self-assessment
What happens on death?Full value is included in your estate for Inheritance Tax (IHT) purposesPension funds not currently included included in estate for IHT purposes

Death benefits are tax free if paid before deceased’s 75th birthday, but subject to beneficiary’s marginal rate of tax if deceased was over 75 at date of death

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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2021’s Budget Impact on UK Dentists

Posted on by Arun Mehra

We have reviewed yesterday’s budget and have provides some further detail, along with our own viewpoints on the announcement and its impact on the UK’s dentists.

There are some significant changes which will play out over the coming months and years. In addition, it does look like things have been made more complex by the new introduction of both some old and new concepts into the tax system.

We’re here to help, so get in touch!

Corporate Tax Announcements from the Budget

Increase in Corporation Tax rates

  • The Chancellor in his Budget recognised that business has benefited from unprecedented support during the Coronavirus. In the spirit of fairness, it therefore recognises the role that business have in repaying the historical borrowing costs, by raising the level of corporation tax from 19% to 25% from 1 April 2023.
  • This higher rate will apply where company profits are in excess of £250,000, with the low rate of 19% being retained for those with profits under £50,000. For those companies with profits between £50,000 and £250,000, there will be marginal relief applying to bridge the gap between the lower and upper limits.
  • These limits will be divided by the number of associated companies; in other words, where one company controls another or both are under the same control. This associated company definition is also going to replace the 51% group company test previously used to identify which companies are required to pay tax by quarterly instalment. This may well increase the number of companies being required to pay tax by instalment and the cash flow impact of this will need to be considered.

Samera’s Viewpoint

This is a return to the days of pre-2014, when multiple rates of corporation tax was last in use. However, the level at which the higher rates apply is much lower (£250,000) compared with £1,500,000 back in 2014. 

This means that more companies will be drawn into paying the higher rate of corporation tax, than in 2014. This will make it increasingly difficult to predict future corporation taxes.

Temporary extension to carry back of trading losses for Corporation Tax

  • This is a welcomed cash-flow benefit for all companies and unincorporated businesses that may now be able carry back losses, that have arisen recently due to reduced demand for their goods and services, to earlier years. The current rules are restricted to only offsetting losses to the previous 12 months profits.
  • The measure applies to companies with accounting periods ending in the period 1 April 2020 to 31 March 2022, and for tax years 2020/21 and 2021/22 for unincorporated businesses. 
  • The effect of the measure will to be extend the period for which the trading loss can be carried back against earlier profits and will be extended from the current one year element to a period of three years, with losses being carried back against later years first.
  • Although there are no restrictions on the amount of the loss to be carried back to the previous year, there will be restrictions on the amount of losses to be carried back to the earlier two years, where a £2m cap will apply for each of the two year periods to 31 March 2022. The £2m cap will apply to groups, where the limit will be shared, and this will need to considered in detail and the submission of a formal allocation statement. There are also measures introduced to allow certain loss carry backs to be claimed outside the company tax return.

Samera’s Viewpoint

This is a welcome cash boost to taxpayers whose profits may have been fundamentally impacted by the COVID-19, which could provide an immediate cash-flow injection. 

However, the measure also introduced more complexity to SME’s in managing their tax affairs with the interaction of the cash-flow boost, impact on R&D claims they may have made and the fact that there is now a small company corporation tax rate.

Super-deduction for companies investing in new plant and machinery

  • The Chancellor has announced a new tax deduction aimed to stimulate investment by UK companies.
  • Between 1 April 2021 and 31 March 2023, companies will be able to claim a corporation tax deduction at 130% of qualifying expenditure. This has not been extended to unincorporated businesses, or other structures such as LLPs.
  • This measure only applies to main rate pool assets, but 50% deduction also announced for expenditure on most new assets that would ordinarily qualify for 6% special rate pool.
  • Although this is a welcome announcement, , the complexity is in the small print. This measure, in particular, is a super-complex super-deduction. 
  • Further complexities arise where assets are sold having previously benefitted from the super-deduction.
  • Timing for expenditure is going to be key. Whilst we would encourage companies to delay expenditure until April, contracts entered into before 3 March will not benefit from the super deduction even if the date of the expenditure is delayed.
  • Whilst the rate of super deduction does not appear to be affected if expenditure is incurred in accounting periods which straddle 1 April 2021, the rate of deduction is reduced for periods straddling 1 April 2023. It may be worth considering changes to accounting periods to mitigate a loss in the deduction if expenditure is planned to be significant in late 2022 or early 2023.
  • Additional conditions will be imposed on expenditure on assets acquired under hire purchase or similar contracts.

Samera’s Viewpoint

From a cash flow perspective the benefit of the enhanced deduction, whilst welcome, will not be felt until the company is due to pay its corporation tax liability. This again introduces increased complexity to the tax system which will make it harder for SME’s to plan.

Temporary increase in Annual Investment Allowance

  • There was confirmation that the Annual Investment Allowance will increase from £200,000 to £1m from 1 January 2021, for expenditure on plant and machinery incurred during the year ended 31 December 2021.
  • This is another boost for businesses who will be able to obtain a 100% tax deduct when they invest in plant and machinery. 

This temporary increase together with the announcement of the super deduction, could play an important factor to help kick-start business investment, and may also attract foreign companies to invest in the UK.

Personal Tax and Private Client Announcements from the Budget

Self-employed grants for the newly self-employed in 2019/20

  • This group of individuals missed grant funding when COVID-19 hit, as they had no proof with HMRC that they were self-employed.
  • Provided their self-assessment returns for 2019/20 have now been filed, these individuals can now claim the 4th and 5th grants. 
  • 4th grant covers period from February until April, available from late April and 5th grant covers May until September, to be claimed from late July.
  • 4th grant available will be 80% of three months’ average profits, capped at £7,500 paid out in a single payment. 
  • Final grant will be based on a turnover test, so more targeted. Those whose turnover has dropped by at least 30% will be eligible to claim up to 80% of a three month average trading profit, but those whose turnover has not dropped as much will only be eligible to claim 30%, capped at £2,850.   
  • It has been confirmed that grants are taxable in the year in which they are received.
  • As this is taxable income, possible knock-on effects are that it should be pensionable income, but could also impact on things like the clawback of child benefit.
  • Finally some support for a group of people who fell into no man’s land from March last year. 

Temporary extension to carry back of trading losses for Income Tax

  • Trading losses made by unincorporated business in tax years 2020/21 and 2021/22 will be eligible for loss carry back relief.
  • The losses can be carried back against the profits of the same trade for a period of three years instead of the usual one year period.
  • A £2m cap will apply to the extended carry back of losses for each tax year.
  • With temporary closure of businesses during the national lockdowns, this measure could prove to be an additional lifeline for some unincorporated businesses to obtain tax repayments from prior years to ease cash flow.

Capital Gains Tax (CGT) – Annual Exempt Amount will remain at current level to April 2026

  • There will be no increase or reduction in the tax-free amount for Capital Gains Tax from the current level until April 2026. There was considerable speculation this may change but this has not occurred as yet.
  • This annual tax-free amount will therefore remain at £12,300 for individuals, personal representatives and some Trusts and £6,150 for all other Trusts.
  • Private clients are now in a position to carefully consider their assets in the round to make decisions when selling their assets or passing their wealth on to the wider family.

Stamp Duty Land Tax (SDLT) – extension to the temporary SDLT holiday

  • Up to the end of June 2021 there will be no SDLT on the first £500,000 for purchases of homes in England and Northern Ireland, where this is the purchaser’s sole residence. The 3% surcharge will remain in place if this will not be the purchaser’s only residential property or if the purchaser is a company.
  • From 1 July to the end of September 2021 the holiday amount reduces to £250,000.
  • Importantly both the new dates of the end of June and September are ‘cliff edges’ so a purchase must be completed to take advantage of the SDLT holiday.
  • This is not only a great boost for those people seeking to get onto the property ladder, especially in conjunction with the news that 95% LTV mortgages will soon be available again, but also good news for those looking to move.
  • In addition to this, for those people with a personally held rental property portfolio it extends the timeframe to consider whether incorporating their property business is worthwhile whilst there is not a punitive upfront SDLT charge to doing so.      

Inheritance tax – nil rate band frozen

  • The Chancellor did not announce any changes for IHT other than to freeze the nil rate band of £325,000 and residence nil rate band of £175,000 until April 2026. The nil rate band has now been frozen at the same level since 6 April 2009, resulting in increasing numbers of estates being brought within IHT, particularly in London and the South East. This measure is expected to raise £985m and highlights the need to take timely advice.
  • We may see further announcements as part of “Tax Day” on 23 March 2021, particularly regarding simplification of lifetime gifts and the interaction of IHT with Capital Gains Tax.

Employment Tax announcements from the Budget

Extension of furlough arrangements

  • Scheme extended to 30 September 2021.
  • Currently employer claims 80% of reference pay.
  • Employer will be required to contribute 10% from 1 July 2021, and 20% for August 2021 and September 2021 (with the employees still receiving 80%).

Samera’s Viewpoint

This measure will ensure employees are no worse off than currently but will increase the cost burden for the business as the scheme winds down to 30 September 2021. 

National Living Wage changes

  • From April 2021, NLW will increase by 2.2% to £8.91 per hour.
  • This was previously for workers aged 25 and over, but now it will apply to workers aged 23 and over.
  • This will add to employer costs which may inadvertently impact jobs.

Samera’s Viewpoint

Again this is an extension to bring further employees within scope in the 23-25 age range.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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Rishi Sunak’s Budget Update

Posted on by Arun Mehra

The Dental Business Guide Podcast Episode | 3rd March 2021
Arun Mehra

Good afternoon. It’s Arun Mehra here on the 3rd March from the Dental Business Guide and I’ll be talking to you about the budget that was announced earlier today by Rishi Sunak. Now, there was a lot of expectation around this budget, with various bits of information being leaked before the budget. But now more details have emerged today and I’m just going to give you a quick summary of the key points that I think affect the dental sector in particular.

As more information comes out, I will be sharing more information on our websites and maybe on this podcast as well. 

So firstly, in respect to the Coronavirus support that’s available from the government – certainly furlough has been extended until the end of September and the government will continue paying 80% of employees salaries for the hours they cannot work.

Employers will have to then also contribute 10% in July and 20% in August and September. So, as we expected, this is something that will help businesses generally for people who’ve got people on furlough, which will pay for them. In addition, support for self employed will also be extended until September.

Now interestingly, I think we are coming out of this pandemic, by the end of June, hopefully, when all the restrictions will be lifted. But this is going to go to the end of September as businesses will reopen. So that, I guess, is a positive sign. 

Now in terms of the state of the economy, and generally about the finances, we saw the economy shrink by about 10% in 2020. There is an expectation of it to rebound. And the Treasury’s hoping in 2021, the annual growth rate will be around 4%, which will hopefully then grow even beyond that after 2021. 

Current borrowing at the moment just out of interest is around £234 billion for the period 2021-22.

Now, the all important area of taxation. I know a lot of our clients are always interested to understand what’s the impact on them, on their personal taxes, on their personal take home pay. There’s been no changes to the rates of income tax, National Insurance, or even VAT. The personal income tax allowance has been frozen at the current rate at 12,570 from 2022 all the way to 2026.

However, that’s likely to change I guess, as we go along – that’s a long time away to happen. In addition, high-rate income tax threshold has also been frozen at 50,270 until 2026 as well.

The area that has changed (and this is a significant) area is that corporation tax will be changing. So by 2023, the highest rate of corporation tax will be 25%. Now, what does that really mean? I suppose there’s a kind of a taper here. So that the companies that are earning a lower rate of tax will still be taxed at 19%. And that’s the vast majority of companies and those companies who are earning under 50,000 pounds a year. But companies who have a high profitability, they’re tapered up to the rate of 25%. So anyone earning in excess of profits of 250,000 pounds, I believe, will be taxed at 25%.

In addition on the tax side of things, the stamp duty holiday on house purchases in England and Northern Ireland had been extended to June, which was kind of what we expected as well. And there will be no changes on inheritance tax or lifetime pension allowances, or even capital gains tax – because I know there was a lot of concern about capital gains tax changing. And an entrepreneur’s relief perhaps being removed – that has not happened thus far in this budget.

And then I suppose finally some other aspects on the business side of things is government really wants to encourage business. That’s what kind of the message I got from this, whether it will have the impact of what it desires – that’s another story. But one of the things he’s trying to do is encourage people to invest in equipment, invest in infrastructure, invest in new items.

They’re saying if for instance, you’ve invested 10,000 pounds in equipment, you’ll be able to get 130% of that, 13,000 pounds worth of that, as a deduction in your tax bill. So that’s a huge incentive. If you’ve got to kit out a dental clinic or business, you’re doing a new surgery, there’s a huge investment opportunity or a tax opportunity to reduce your tax bill as well.

In addition, there’s the other area to look at – business rates. The holiday for that continues in England until June with, 75% discount after that. 

So, I suppose in summary, we are in a pandemic, still, I think they’ve tried to minimise the impact of tax rises on income tax personal, especially individual.

Inevitably, there will have to be some tax rises, that’s going to impact the larger corporates in a couple of years time.

I guess we will see and hopefully we will grow back. One last thing I haven’t mentioned is they want to encourage and train people in more business knowledge, business acumen to help businesses grow on the digital front and also in just general management side of things as well. 

So some new incentives and new schemes that are being launched there today, which are worth looking for. And you can find out about those on gov.uk/helptogrow. 

So in summary, an interesting budget. I suppose there will be some deductions and benefits for businesses out there. It’s good that income tax hasn’t risen. Corporate tax will be impacting on the larger businesses in a few years time.

Hopefully, this will encourage the economy to grow and to get back on its feet post pandemic. Now if you have any questions on this or want further detail, get in touch with me via the samera.co.uk website and I look forward to hearing from you soon. Okay, and check out our next podcast soon.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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How Samera Makes Dental Accounts Simple

Posted on by Arun Mehra

Covid-19 revolutionised the way many businesses operate overnight, forcing many into the digital world. Accountancy was no exception to this.

Like many office occupations, accounting is one of those that is heavily dependent on the use of paper. Heavy into social contact and very heavy into how many hours are spent in the office.

But instead of wasting time trying to react to the change, here at Samera Dental Accountants, we believe in getting ahead of the changes that are occurring and embrace them by creating a more proactive mindset and approach.

Everything Changed in 2020

2020 was the year that the world had to transition all its processes virtually, in almost all its operations. The pandemic has accelerated the need for companies to digitally transform their business in order to be successful in 2021.

Whilst the accountancy world was already adopting a more streamlined workflow using technology, COVID-19 helped speed up the process.

Whether it is new processes or new regulations, this time is pivotal for many businesses, including accountants, to transform all their processes to digital.

Business Have 2 Choices

With this being said, many businesses have two options at their doorstep right now. Either to deploy stop-gap measures, hoping for a return to some sort of normalcy in the near future to carry on how we once did before the pandemic, or they can dive in and embrace what is becoming the future for accounting.

The latter is far more likely, considering our current economic climate. Our current environment is likely to stay for a long time and is the impetus for rapid digital change in the world of accounting.

Go Digital With Your Dental Accounts

The days of sending in paper records is well and truly over. We do not accept paper records and now request clients to send all documents electronically, using hubdoc.

All this important information can be stored confidentially, and is then used by our accountants and processed quickly, using Xero. There was already a shift towards being future-ready as we have accepted that the future of automation is not just coming, it is already here and will only increase and evolve rapidly. 

As dental accountants, we have been able to minimise office spaces, reduce costs and empower our entire team by establishing security policies for all our remote workers, acquiring specialist technology, changing processes and providing ongoing technical training.

COVID-19 has exponentially increased the need for organisations to respond, recover and overcome these changes in order to succeed or even to simply stay above water during these uncertain times. Marking a major turning point in the world of accounting and bringing fresh operations and processes for the new normal in the coming years.

Bring Dental Accounts into the Digital Age

Everything is book-keeped in Xero, with clients having 24/7 access to their information. In today’s fast changing world, having access to this information to make quick, fast decisions is key for any business to actually be able to survive, let alone thrive. 

Cash flow management is essential, so if you need to plan your cash, or need additional cash, lenders will want to see this information too – not out of date accounts. Real time accounts are now possible, and are now demanded by businesses and lenders, so it is essential to keep your financial records organised and up to date.

Although numerous changes are already impacting various industries, there is no current end in sight to the global economic and health crisis we are experiencing. This evidently means, there are more changes to come.

Click here to read our article on Dentist and Dental Associate Expenses Guide

Dental Accounts & Tax Specialists

As dental practice owners ourselves, we know what makes a clinic tick. We have been working with dentists for over 20 years to help manage their accounts and tax.

Whether you’re a dental associate, run your own practice or own a dental group and are looking to save time, money and effort on your accounts and tax then we want to hear from you. Our digital platform takes the hassle and the paperwork out of accounts.

To find out more about how you can save time, money and effort on your accounts and tax when you automate your finances with Samera, book a free consultation with one of our accounting team today.

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Dental Accounts & tax

Dental Accounts & Tax: Further Information

For more articles, webinars and blogs on dental accounts check out the dental accountancy section of our Learning Centre and follow us on YouTube, Facebook, LinkedIn and Instagram.

Self employment grant – Round 3

Posted on by Alex Delmont

For those of you that managed to secure a government grant for being self employed earlier in the year, make sure you claim your third tranche now.

The government portal is now open, and you can make your claim for the SEISS grant – round 3.

It’s all quite self explanatory and if you have done this before, you should know what you are doing.

All the details on the following link:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

We know for some, every penny currently matters, so make sure you don’t miss out on this, if you qualified previously.

If you were not eligible previously, unfortunately, you will not be able to claim this grant this time around either.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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Tax Payments for Dentists in 2019

Posted on by Chris O'Shea

As we start 2019, your accountants will be letting you know what taxes you must pay and the dates by which the payments are due.

If you have not put enough aside to cover the tax liability, or you have had a great year and the liability is higher than expected, you can spread the cost by taking a tax loan over 12 -24 months.

Most tax loans are provided over 12 months. However, some, such as Corporation tax, can be extended further in the right circumstances.
Short term loans are, by their very nature, more expensive. This is because any lender wishes to get a fair return on their loan even over a short period. Therefore, be prepared to pay a higher rate of interest than you are used to.

You can, of course, approach your own bank for assistance. However, mainstream banks are not usually receptive to these approaches, believing that you should have planned for this eventuality and have the funds safely put aside.

We have access to several lenders and we can obtain quotes for you. Samera Finance make no charge to the client for this service.

Further Information on Accounts & Tax

Our team of specialist accountants and tax experts can help manage, process and structure your business’s finances. From management accounts and payroll & pensions to tax planning and cash flow management, we can take care of the full back-office function of your business.

Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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Disguised Remuneration ….do you have a loan from a Trust?

Posted on by Arun Mehra

In recent years we have seen many professionals become involved in various tax planning arrangements, many of which included trusts. Therefore, if you have and you don’t know what to do here is a quick update and the steps you should seriously consider taking.

Firstly, HMRC has introduced legislation that will bite upon loan balances from a Trust that remains outstanding on 05 April 2019. These fall into two categories. This is an important date, and less than one year away, so consideration of this issue must be high on your list of priorities.

Remuneration Trusts

If you are self-employed you may have set up one of these in the last 10 years. The idea was that you could borrow money back from the Trusts untaxed.

The new legislation means that if you have done this then and you haven’t repaid the loan then you will need to declare the loan balance as at 05 April 2019 on your 2018/19 Tax Return. HMRC will then seek to tax the full balance owing in this tax year. So if you had, say, 3 loans at £250,000 over a 5 year period in the past and these have not been repaid, you will be liable to tax on £750,000 all in 2018/19.

If you think that this is harsh, you are quite correct. It is legislation designed to make those affected contact HMRC with a view to settling with them and not having all the loans taxed in one year and then creating a tax charge at the very highest tax rates.

If you are in this situation, then it’s important you have a suitable course of action to ensure this does not affect you. If you need help, we have a team of experts at our disposal to help you in this situation.

Employee Benefit Trusts (EBT’s) and Employer Financed Retirement Benefit Schemes

(EFRBS)  

These arrangements are for employees and, in almost all cases, relate to the Directors of family-owned companies.

The legislation referred to above is desired to tax loans balances that remain unpaid by employees/directors when the loan has come from a Trust set up by the Company.

The loan balances are liable to PAYE and National Insurance Contributions and all details will have to be supplied to HMRC by the Employer in 2018/19.
HMRC are happy to settle matters now with a scheme that allows certain fairly generous concessions and have just extended the deadline for registration to 30 September 2018.

It is advised that you take advantage of this opportunity and if assistance is needed please contact us.

No two cases are the same and there may be facts in each case that can mitigate the final settlement figures. There are issues arising from time limits and HMRC need challenging if they are making incorrect assumptions.

It is strongly recommended that you do not leave matters until April 2019 and take advice now on finding the best resolution to what can be a very serious issue. If there are concerns regarding funding any settlement, a period of time to pay can be negotiated for you.

Contact Us for help with Disguised Remuneration

If you are in this situation or need assistance, please contact us as soon as possible.

Building a Healthcare Business: Further Information

To find out more about building a successful healthcare business, check out our Learning Centre, full of articles and webinars covering how to buy, start, grow and sell a medical health company, or book a free, no-obligation consultation with one of the team. 

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Myth Busting the London Orthodontic Tender SQ

Posted on by Arun Mehra

In this recorded webinar Farisa Siddique and Laura Graham discuss their thoughts and tips on the approach to complete the London Orthodontic Tender SQ.

Building a Healthcare Business: Further Information

To find out more about building a successful healthcare business, check out our Learning Centre, full of articles and webinars covering how to buy, start, grow and sell a medical health company, or book a free, no-obligation consultation with one of the team. 

Learning Centre
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10 Tax Saving Tips for Vets

Posted on by Arun Mehra

The 2017 tax year saw many new changes in tax legislation and planning ahead is more important than ever to ensure you work within the rules to not miss out on a tax saving opportunity.

In light of this, here are our top tax saving tips for vets.

Selective Capital Allowances Planning

Even though you may have spent money on capital items in a tax year, there is no requirement to claim capital allowances at all.

This matters when your circumstances in a tax year mean that if you claimed all of the capital allowances you are eligible for you would lose your personal allowance.

E.g. Vet ABC has profits of £100k and losses of £50k brought forward which can be used to reduce the taxable profits.

It also spent £50k on capital items in the year upon which capital allowances can be claimed. However, an election can be made to reduce the claim to £38.5k instead leaving £11.5k as the taxable profits. (I.e. £100k – £50k – £38.5k = £11.5k).

By restricting the amount of capital allowances claimed you can still make use of your personal allowances (Which is £11,500 in 2017/18) and carry forward the unclaimed capital allowances into the next year instead of losing them.

Dividend Allowance

With the new rates of dividends that came in on the 6th April 2016, dividend income is now taxed at 7.5%, 32.5% and 38.1%, depending on whether your total income (including the dividend itself) puts you into the basic rate, higher rate or top rate bracket.

Along with the new rates the Chancellor has now given every UK tax payer a new £5,000 tax free “dividend allowance” which means the first £5,000 of dividend income is tax-free. To minimize your tax position, it is possible to allocate some shares to a spouse who doesn’t have dividend income to make sure this dividend allowance isn’t lost. This must be done carefully and within the accepted boundaries to be acceptable to HMRC. For 2017-18 this allowance will be reduced to £2,000.

Gift Aid

Remember to record all the charity donations you’ve made. These reduce your taxable income.

If you’re a higher rate taxpayer, you can personally claim back tax.
Example – You donate £100 to charity – they claim Gift Aid to make your donation £125. You pay 40% tax so you can personally claim back £25.00 (£125 x 20%).

Care needs to be taken here though. It can sometimes cost you tax. If you’re close to the personal allowance, this could be the case. Speak to an accountant to check what tax you are due back!

Pension contributions

When paying into your pension, you receive tax relief on any contributions that you make. This is at the highest rate of income tax that you pay, provided that the total gross pension contributions paid into your pension scheme, by you and anyone else don’t exceed the lower of your annual earnings and the annual allowance.

This could mean that, if you’re a higher rate taxpayer, £10,000 worth of contributions could get you £4,000 tax relief. Meaning you’re receiving at least a £10,000 benefit for only £6,000.

Limited Company Research & Development

Are you doing something that has never been done before – in advance of current technologies and sciences? This could be something as simple as a website or an app.

Millions worth of tax relief is missed by SME’s due to people not knowing about this extremely generous tax relief for qualifying expenditure.
For each £10,000 spent on R&D you could receive £22,500 worth of corporation tax relief. That’s means the expense only really cost you just over half of what you spent at £5,500.

The tax rules surrounding this are very complex and therefore require a professional to ensure the expenses qualify.

Cash in on self-employment profits taxed twice

Again, another relief people know little about.

If your self-employment year-end differs from 5th April, it’s very likely you’ve paid tax twice on your overlap profits and therefore with a little planning, you can get this back!

Many sole traders and businesses have a tax relief just waiting to be used and can ‘cash it in’ at any time they choose.

Avoid paying more tax than ‘real’ profits on your property investment – making it unsustainable

At present, full tax relief is available for interest on a loan used in a property business. The funds may have been used to purchase the buy to let property, to make major repairs, or just to fund the working capital of the property business.

From April 2017, tax relief on interest in property businesses (including single buy to lets) will be restricted so that by 2020, interest will not be an allowable expense in computing the profits of the business.

A letting activity that has a low level of interest in relation to the borrowings will not be too badly affected, but larger property businesses using debt to expand the portfolio will find that their business model has been severely undermined.

Example (single buy to let)

John is a vet and is 49 years old; he is a 40% taxpayer. He has purchased a buy to let property as an investment. He has presently got borrowings of £50,000 on his property which has a current market value of £160,000. His interest rate is 5%. If his interest rate was to rise to 10% he would see the following change:
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Utilise your tax free personal savings allowance

Do you have a credit balance Director’s loan account (amount owing to you from your Ltd company)?

If so, you could be missing out on utilizing your tax free personal savings allowance.

Invest wisely

There are huge tax breaks for investments in EIS / SEIS and VCT’s. To say they are generous is a huge understatement.

For example, you could invest £10,000 into an SEIS and get £5,000 immediate tax relief. What’s more, due to loss relief, even if your investment folds, your actual loss will only be £2,750. You can even carry back to the previous year.

Again, the tax legislation surrounding these different investment schemes are complex and the level of relief depends on the individual person so you should ensure you obtain independent tax advice before proceeding.
Whether it is claiming for use of home as office, or laundry allowance every little helps and working with a Healthcare Accountant means they will be able to maximize the items you can claim for.

Tax is a complicated subject which requires knowledge and expertise.
The above is just a taste of some of the top tips, however, we strongly recommend you seek professional advice on any of the subjects detailed above.

Further Information on Accounts & Tax

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Book a free, no-obligation consultation with one of the team to find out how we can make your accounts & tax easier, quicker and cheaper.

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