Overview
As a self-employed dentist, you should understand the basic principles of income tax and National Insurance Contributions (NIC) for you and, if relevant, your employees. Always seek professional advice from an accountant or independent financial adviser.
As a practice owner, you will also need to be aware of the implication of Capital Gains Tax on the value of your practice and the tax implications of any gifts to staff and business entertaining.
In 2019, Her Majesty’s Revenue and Customs (HMRC) introduced making tax digital for VAT – a fully digital system for submitting quarterly VAT returns and removing the risk of missed deadlines and errors.
Income from services to protect, maintain and restore oral health is exempt VAT but VAT is payable on income from cosmetic services, dental products and activities such as report writing and lecturing. You must register for VAT if your income from non-exempt services reaches the current threshold of £85,000.
Key leaning points
This advice provides a basic overview of your various possible tax obligations:
- Submitting a self-assessment tax return if you are a self-employed or an employee of more than one employer.
- Calculating income tax and NICs based on your earnings and understanding when payment is due.
- An explanation of the new digital arrangements for reporting on and paying VAT quarterly.
- How capital gains tax has implications for your professional career and especially if you are selling your practice.
- The tax implications of entertaining and rewarding staff.