Self employed Dentist? It’s time to brush up on your tax knowledge and make sure you are claiming your full entitlement and maximising any tax relief opportunities. We promise this isn’t going to hurt…
If you are self employed or operating as a limited company you will pay tax at different rates and in different ways but in both cases the amount you will pay is based on your taxable profits. Your taxable profit is calculated as your income less any allowable expenses.
Allowable expenses are defined as business expenses incurred wholly and exclusively for the purpose of your trade. As they have the effect of reducing your taxable profit it is important to make sure you have included them when you reach the end of a tax year or financial year since they will reduce the amount of tax you need to pay.
Our network of accountants suggest that if you are not sure whether an expenses is tax deductible or not, always keep hold of the receipt to discuss with them when preparing your end of year accounts.
A List of Deductible Expenses for Dentists
So, what can you actually claim for?
Most Dentists can claim tax relief on a variety of business expenses, but many are either confused, too busy or unaware of their entitlement and so do not make a claim. The end result is they overpay their tax!
As a general rule, if you’re self employed you can claim tax relief on expenses such as:
Your subscriptions to your governing bodies such as BDA (British Dental Association), DDU (Dental Defence Union) and GDC (General Dental Council) subscriptions
Sales and marketing material
In your search for your next big contract, you may need things like business cards for when you meet and greet new people. As they are for the purpose of your trade, these can be deducted from your taxable profits.
You may have had to sign a paper contract and post it off the old fashioned way. No matter how small, keep the receipt because it all counts towards reducing your tax bill
Legal and Professional Fees
Costs of running your business, such as accountants fees are again deductible. But your accountant will probably know to include these himself!
We don’t like to think of things going wrong, but no doubt you will be required to have some form of liability insurance. This cost and the IPT is again allowable against your tax.
Courses & Training
Techniques change and things move forward, so don’t forget to keep the receipts for any cost of courses to keep your knowledge up to date. And if you subscribe to dentist magazines, either online or by post, you can claim for these too.
Dental Workwear & Equipment
While things like the shoes and coat you wear to work are not allowable business expenses, scrubs and tools are. You need these items to make your living, so naturally they are both allowable.
Mileage & Travel
Depending on different factors, you may be able to claim the cost of travel or mileage when traveling for work. Mileage is currently claimed at 45p per mile for the first 10,000 miles and 25p thereafter. We suggest seeking advice from your accountant to establish whether or not you can claim for this against your tax. Keep a note of where you have been as well as any contract details, so they can check this for you.
Remember, always seek the advice of a fully qualified accountant to ensure you remain compliant. Was this blog worth a smile? Tweet @aa_accountants and let us know!