The Government’s decision to delay the launch of its ‘Making Tax Digital’ (MTD) proposal is welcome news for dentists amid concerns that complying with the controversial scheme would have represented a sizable financial outlay for practice owners. According to the Institute of Chartered Accountants in England and Wales (ICAEW), implementing the system may cost UK SMEs at least £3 billion in addition to ongoing compliance costs.
The MTD policy, originally due to commence in April 2018, will now be delayed by at least a year. It aims to provide a single online location for self-employed workers and businesses to manage their tax and would require the submission of quarterly updates to HMRC. This could be problematic given dentists are not registered for VAT, and in light of the fact that many dental practices are, by self-proclaim, unaccustomed to preparing regular and accurate management accounts.
While the MTD headache may have gone away (at least temporarily for now), dentists must soon turn their thoughts towards paying their July tax bill. The 31 January and 31 July tax payment deadlines are often stressful periods, particularly for those who have recently become self-employed dental associates. Due to time constraints, many put off financial planning and then struggle to find the cash to meet their tax liabilities.
Specialist financial support
By seeking guidance from trusted and experienced experts, dentists can alleviate financial pressures and reduce their chances of being caught unaware by unexpectedly high tax obligations and other short term expenditures. Appointing a specialist accountant that has an intrinsic understanding of the dental sector is recommended. They will help you to get your financial affairs in order and ensure you plan well in advance for future liabilities, from regular account preparation to advising on how to offset taxable income with business related expenditure.
“More self-employed professionals are turning to tailored funding to maximise their cash flow.”
Even with a meticulous financial strategy in place, unexpected events or changes in personal circumstances can leave dentists with dwindling resources to cover their tax bill. Increasingly, more self-employed professionals are turning to tailored funding solutions from specialist finance providers as a simple and effective way to maximise their cash flow. By doing so you can spread the cost of your tax bill over six or 12 months with an unsecured loan, enabling you to utilise available working capital where you and your practice really need it.
Those that are particularly short of time can quickly and easily apply online for tax funding using self-service digital services which are available 24/7, such as Wesleyan Bank’s Tax Portal. Dentists can obtain an instant quote for spreading the cost over six or 12 monthly instalments. Once approved, the proceeds of the loan can either be paid directly to them or to HMRC, minimising time-consuming administration.
Good financial planning, whilst seen as a chore, can make the difference between a successful or an ailing practice. Specialist accountants and dental specific financial providers are on hand to give far reaching advice, allowing you to focus on running a thriving and profitable business.
About John Clarke
John Clarke is Head of Business Development at Wesleyan Bank. John has amassed 18 years’ experience in the finance industry and has deep domain expertise in the professions, specifically within the dental and legal sectors. He has recently played a key role in several multi-million-pound dental acquisition transactions.