What an exciting time! Unfortunately there are some boring bits, one of which is to organise your finances and deal with the tax. The easiest way to deal with this is simply hand it to the professionals, who will generally deal with it for free as part of the first year’s accounting package.
So what do you need to do?
You need to register as Self Employed. There are a couple of forms which you need to do on this, which will enable the taxman to set up his file for you and to allow him to talk to us so we can make sure all is well. Please follow the link below, which will take you to all the forms you need.
Once you are registered ……. nothing!
For you …….. there is nothing to do until after the next 5 April (the end of the tax year) at which time HMRC will send you a formal and legal notification that you must submit a Tax Return.
But there are things that your accountant will be doing, like projecting your likely tax so you can budget, checking your schedules to make sure you are being paid what you’re supposed to be, that your superannuation is being correctly calculated, and showing you which records you need to keep.
OK, so what exactly is a “Tax Return”?
It’s easiest to think of the Tax Return as an information-gathering form, on which all your income from various sources (Self Employed, PAYE, bank interest, etc) is gathered, and on which the allowances and reliefs to which you may be entitled are claimed. These figures are all collated in a particular HMRC format, including your accounts as a self employed Associate. This ‘format’ is the “Tax Return”.
We as your accountant will also have worked out the amount of tax that you are due to pay, of course, and done all the fancy thinking to minimise the liability. That calculation also goes into the Return. (…..and that’s what you pay the accountants for, by the way, not inputting the figures. Anybody can do that bit.)
We will then whizz the whole Tax Return down the wires to HMRC.
Your compliance with the law is at that stage complete.
If this sounds straightforward, it is!
Well, it is for your accountant, as we have the training and the experience. Making sure everything is claimed, and presenting the figures in the right form to HMRC and doing the tax computations to ensure that you only pay the right amount of tax can be complicated and time-consuming. With dentists in particular, there are certain wrinkles and nuances of which only a specialist tax adviser will be aware, and of course calculation of the tax is really only the start. It’s the tax saving advice and ongoing organisation of your affairs to minimise your tax exposure in the long term which changes what you pay to your accountant from being just a cost to being a good investment.
You don’t know what you don’t know.
We do. It is worth spending some money to save a lot.