Specialist medical accountants are alerting new independent practitioners of the need to complete a self-assessment tax return for the 2022-23 tax year.
Meanwhile, some of them may need to act fast to avoid problems with their tax office.
If doctors started working privately in the tax year ended 5 April 2023 they should have registered with HM Revenue and Customs (HMRC) for self-assessment by 5 October.
There are a number of reasons why doctors may need to complete a self-assessment tax return and some of the more common reasons include:
- If your taxable earnings in the tax year are in excess of £100,000;
- If you wish to claim tax relief on employments expenses of over £2,500;
- If you have received untaxed income in the tax year. This includes rental income and self-employed income.
Alec James, a partner with Sandison Easson specialist medical accountants, explained: ‘When starting out in private practice, many doctors will begin on a self-employed basis while they build their practice.
‘This means that the income is paid directly to the doctor without tax or Vational Insurance deducted by the person making the payment. The good news is that if your self-employed income is less than £1,000, the income should be covered by the “Trading Allowance”. This negates the need for you to complete a self-assessment tax return – unless any of the other reasons above apply.’
He added the following points:
Registering for self-assessment can be done online via your Government Gateway account or in the post – but registering via the post can take a lot longer for HMRC to receive and process your application.
If you wish to register online and you do not already have a Government Gateway account, you will need to allow time to register for that.
Once you have registered for self-assessment, you will be issued with a Unique Taxpayer Reference – or UTR as it is often referred. This is a ten-digit number and, as with your National Insurance number, will remain with you for the rest of your life. You will need this number for any communications with HMRC, including your tax return submission.
Your 2022-23 tax return is due for submission to HMRC by 31 January 2024 if submitting online, and earlier if you opt to submit a paper return or settle your tax liability via future PAYE income. If the deadline is not met, HMRC imposes penalties that can quickly increase.
Mr James, an Independent Practitioner Today columnist, said: ‘Of course, if you have complex tax affairs, seeking the advice of a specialist medical accountant can prove invaluable to ensure you are paying the correct amount of tax on your self-employed income.’
Customers can use HMRC’s online checking tool on GOV.UK to quickly assess whether they will need to complete a tax return. And they can use the step-by-step guide to check what they need to do to file their first self-assessment tax return.
Myrtle Lloyd, HMRC’s director general for customer services, said: ‘If you are new to self-assessment and unsure how the process works, HMRC is here to help. We have a wealth of resources and guidance available on GOV.UK to help customers register, sign up to the online services and complete their tax return.
‘We want to help customers get their tax right first time. Just search ‘Self Assessment’ on GOV.UK to find out more.’