Embrace tax planning for a wealthier future – Michael LansdellFeatured Products Promotional Features
Posted by: The Probe 8th April 2019
“Nothing can be said to be certain, except death and taxes,” wrote Benjamin Franklin in 1798. Although attributed to Franklin, the phrase actually originated some years before with the earliest appearance in 1716, according to sources.[i]
History lesson aside, the obligation to pay our taxes has been a gripe for over 300 years, then. We all work hard for the money – often during long, stressful hours. Of course, in the dental field the rewards are enormous and not only financial. Great dentistry and the job of motivating patients to practice daily preventive care really can change lives. Who needs HMRC, with its ever-changing rules, making life difficult?
Taxes aren’t the most appealing topic. If you own a dental practice, or are an inspiring practice owner, business management and tax planning isn’t something that would have been taught at dental school, either. HMRC has always had a rather unfortunate image too; that it’s institutionally hostile with the slightly sinister-sounding ‘Taxman’ who just wants to take our money.
As taxes are inevitable, though, it’s time to be positive about how you can make the system work for you, while remaining compliant with the law. If you arm yourself with the right resources, you will be able to minimise your tax andmaximise your wealth. You can plan for the future too, including taking care of yourself andour loved ones. Let’s face it, there will be a whole range of people that you would rather give your hard-earned cash to other than HMRC! With a practical and on-going tax mitigation plan, this is totally possible. And if you are a business owner, good tax structures will help it to survive, grow and truly thrive.
Is it time for an early Spring clean? With plenty of time before the end of the financial year, why not set about sorting through your finances – personal and business – looking at how you pay tax and where opportunities for mitigation may lie. Get organised with the help of a great accountant, who can consider things objectively and get you up to speed with changes to the law, or changes that are on the horizon. It is incredibly satisfying to know that you are in control. With an open mind, and with the help of an expert who understands the dental industry, you may realise that a re-structure of your tax planning is overdue and that you are happy to switch things up.
An early Spring clean will give you a chance to review your processes for organising financial matters too. One reason to blitz your systems and ensure that they are in impeccable order is because HMRC is committed to becoming fully digital by 2020. Making Tax Digital(MTD) outlined its vision in 2015, heralding the end of the annual tax return – once the roll-out is complete – so that taxpayers will be able to file, pay and update information relating to their digital tax account whenever it suits, enabling HMRC to process as the data comes in. MTD is a confident step forward for streamlining tax-related admin; errors won’t remain on file longer than is necessary and the wait for repayments, for example, will be shorter. Ultimately, a fully digitalised system that operates more closely to real-time will give the user a clear and current picture, allowing them to plan ahead better.
Options for practice owners
The business environment ischanging – which MTD recognises – and rolling with it will keep yours running efficiently. Getting sorted now will mean you can make any modifications to your processes in good time, so the transition is smooth. Maybe it’s time to go paperless? There is some fantastic, user-friendly software available.
Structuring your business effectively from a tax perspective – whether you have been running a practice for year, or are just starting out – is essential. Think of it as constantly looking for compliant ways to minimise tax exposure in order to maximise your business andpersonal funds. There may be some tax-deductible business expenses you are not aware of, for example. In 2020, Corporation Tax is due to be cut to 17 per cent – is it time to consider incorporation? Use all the resources available and you can breathe new life into your practice, as well as help to bolster its defences against economic instability.
Keep it personal
When your business is tax efficient, you can manage your personal wealth better. It goes back to the people and places you would rather give your money to than HMRC – for most people, this includes their retirement fund. When it comes to income tax, knowledge is power and timing is often key. The personal allowance for income tax is due to rise in 2020, to £12,500 (basic rate) and £50,000 (higher rate), for example. At time of writing, the prospect of a no-deal Brexit, and the short and long-term repercussions of our (still scheduled!) departure from the EU in March 2019 are at the forefront of most business owners’ minds. What will a turbulent time ahead mean for taxpayers? The UK economy certainly gets the bulk of its tax revenues from top earners. However, if things reach a state of serious flux, the top earners have the most options for their next move, which could include disposing of assets, such as a business or property. There are changes ahead regarding property tax; pensions tax reform is back on the table as well. The impact of any Capital Gains Tax also need to be taken into consideration when putting together an efficient business and personal tax structure.
Your working life may be dedicated to providing excellent high-quality patient care, but a secure future for yourself and your loved ones is high on every dental practitioner and practice owner’s agenda. Great tax planning will allow you to maximise all the benefits you deserve, which includes enjoying peace of mind knowing that you are making the most of your hard-earned pennies. Taxes are inevitable, but with a positive approach and the right advice, planning can be pain-free. You might even enjoy it, too – yes, really!
To find out more, call Lansdell & Rose on 020 7376 9333,
Or visit www.lansdellrose.co.uk
[i]Wikipedia. Death and taxes (idiom). Link: https://en.wikipedia.org/wiki/Death_and_taxes_%28idiom%29(accessed October 2018).