With 2018 now in full swing, many dentists have turned their attention to their personal and career aspirations in the coming 12 months, from owning their own dental practice to investing in new technology and specialist dental equipment. Inevitably, the ability to astutely plan and manage your finances can ultimately mean the difference between achieving a solid foundation for growth, or effectively having one hand tied behind your back.
For many self-employed dentists, one of the first biggest milestones of 2018 is 31st January – the date when they must submit and pay their self-assessment tax bill to HM Revenue & Customs (HMRC). Funding the due amount can be difficult for some, particularly as it comes on the coat-tail of the festive season when they have faced greater financial commitments.
Changes to self-assessment payment methods
If this wasn’t challenging enough, the recent removal of a payment method by HMRC could present an unexpected challenge to almost half a million UK taxpayers, especially self-employed professionals who are hoping to defer the pain of their annual liability.
From 13th January 2018, HMRC withdrew the facility to pay for self-assessment tax returns by personal credit card with immediate effect. The new legislation also extends to other digital payment methods, such as PayPal and Apple Pay. This is due to a new EU Directive, known as Payment Services Directive 2 regulations, which bans all organisations and companies from levying additional commission charges to process payments imposed by credit card companies. It is estimated that HMRC passes on in the region of £12m a year in commission payments to card issuers.
The change, which was only communicated to some taxpayers in December, is not the first time HMRC has come under fire just days into 2018. On 4th January, the organisation experienced an IT system glitch to its online payment service which temporarily prevented self-assessment taxpayers from being unable to set up a Direct Debit.
An easier way to pay your tax in 2018
In 2017, approximately 454,000 used personal credit cards to pay their tax to ease the financial pressure of paying on time. If this applies to you, now is the time to decide an alternative method of settling your bill without unduly impacting your cash flow.
Fortunately, there are easier ways to fund your tax bill. Alternative online digital services, such as Wesleyan Bank’s TaxFunder portal, offer a more flexible solution to pay for the cost of tax liabilities.
The portal can be accessed 24 hours a day, seven days a week, and applicants are guided through a simple application process in two minutes or less, making it readily accessible for busy dentists who are typically short of time. Repayments, at competitive rates, can be conveniently spread over six or 12 months and once approved, funds can be paid directly to HMRC.
HMRC’s decision to ban personal credit card payments, less than three weeks before the deadline for submitting and paying their self-assessment tax bill, was never going to be warmly received by approximately the 11 million Britons who are trying to complete their annual return on time. However, by considering an alternative source of funding and spreading the cost over time, dentists can alleviate cash flow worries without compromising their existing banking lines and avoid potential financial penalties for late payments.