We bring you the best possible solutions for your Practice.
Why choose US?
Specialist medical accountants.
We give a personal service. Our clients are important to us and they tell us that this shows in the way we interact with them.
We are specialist in our field and due to our vast experience, we do not expect to come across any problem which we have not seen several times before. Our experience and extensive knowledge enables us to deal with your problems effectively and quickly.
Our taxation expertise enables us to keep your personal and practice tax bills to a minimum.
Our Costs are agreed in advance and are fixed so our clients are always clear about our costs from day one.
To be consistent we provide our clients personal service, so they will have same member of staff dealing with their tax affairs each year to provide our clients consistent and high level of service.
We provide very high standards of client services due to which we have never lost a GP practice as a client in last 8 years and we continue to grow.
We bring you the best possible solutions for your Practice.
As a GP you already know that you’re part of the NHS Superannuation Scheme. Do you know what the scheme will give you when you eventually retire?
Pension planning is almost always left until a few years before retirement. That’s partly down to complexity. Try retirement planning alone and you’ll find it isn’t just the time needed that defeats you. Terminology, methods of calculation and benefit options are often impenetrable.
The Limits of NHS Information
The NHS Pensions Agencies will only give you figures up to the last confirmed pensionable earnings.
Information from the NHS is focused on benefits only payable through the NHS and this is often not the full picture.
Many GP’s make additional pension contributions through ‘Added Years’ Additional Voluntary Contributions (AVC’s) or to external Free Standing arrangements. You could contribute to a Personal Pension plan or a Self Invested Personal Pension (SIPP).
If you want to make the right choices about your own future, you need the most complete information. We can help you to work out both what you want to receive as a pension and what you would actually need as a minimum income.
We can also help you with the challenging task of keeping track of what you currently have, what is it worth right now and what it may be worth in the future.
How We Can Help
We work with specialists in NHS pensions. We would suggest you meet our specialist to discuss the detail.
You’ll sign mandates that allow our specialist to talk with pension providers and to obtain all other relevant information.
Many GP’s will be affected by the reduction in both the Annual Pension Allowance and the Lifetime Pension Allowance.
Annual Allowance
The annual allowance is the maximum amount that an individual’s pension savings can grow in one year without a tax implication. The Annual Allowance limit covers all your pensions except the State Pension and therefore includes the NHS scheme and any private pension. If you exceed the annual pension allowance you may face an additional tax bill.
Prior to 5th April 2012, an individual’s pension could increase tax free in a year by up to £255,000. This was reduced to £50,000 for the 2012 tax year and will reduce further to £40,000 by the year ending 5th April 2015.
Many GP’s look at the amount of superannuation they pay each year and assume that as this figure is less than £50,000 (soon to be £40,000), they will be unaffected by this change in legislation. However, for defined benefit pension schemes, such as the NHS scheme, the Annual Allowance value is a ‘deemed’ amount based on the increase in pension benefits over a tax year. It is not based on the amount of superannuation paid in a tax year.
It is difficult to predict in advance who might be affected by the Annual Allowance Charge. If you have exceeded the Annual Allowance, the pension agency will write to you after the end of the tax year but if you have a separate personal pension this will not be taken into account and you may have exceeded the limit without being aware of this.
Who is most likely to be affected?
The following GP’s are most likely to be affected:
- Members buying “Added Years” or “Additional Pension”.
- High-earners and members with Enhanced Protection.
- Members with long service and/or significant promotion or pay rises.
- Members retiring on redundancy grounds where some of the redundancy money is diverted into the pension scheme to provide additional benefits.
- Members with special class status.
How We Can Help
We correspond with the NHS Pension authority on your behalf to obtain details of your NHS Pension growth.
We can then advise you if together with other pensions, you have exceeded the annual allowance or alternatively if there are allowances available to carry forward.
We can put you in touch with a specialist medical IFA who can advise you of your various options.
The lifetime allowance is a limit on the amount of value a person can have saved in pension schemes without incurring any additional tax charge. If this pension savings limit is exceeded then tax is charged on the excess over the limit when a pension is drawn.
For pension benefits exceeding the lifetime allowance the excess amount is liable to additional tax at a rate of 25%.
The Pension Lifetime allowance was reduced from £1.8M to £1.5M in 2012. From 6th April 2014 this fell still further to £1.25M.
To compare your NHS pension savings against the lifetime limit you multiply your annual pension by 20 and add the lump sum. Provided that the total is less than the lifetime limit then you will avoid the additional tax charge.
However, some doctors leave it too late to do this calculation leaving them no option but to pay the additional tax.
The lifetime allowance includes all pension savings not just the NHS Pension Scheme. You need to include all private pension provisions when considering the limit.
How We Can Help
We correspond with the NHS Pension authority on your behalf to obtain details of your anticipated future NHS Pension to enable us to check how close you are to the lifetime limit.
How it affects the amount of tax you pay
Many GP principals find that their tax payments in January and July fluctuate considerably making it difficult to manage practice cash flow. If partnership profits remain similar each year, tax payments should remain similar.
However, often tax payments are affected as much by the amount of superannuation paid as by the level of partnership profit.
The ‘Paid’ Basis
A tax deduction can be claimed for most expenses when the expense is incurred. For superannuation, however, a tax deduction can only be claimed when superannuation is paid. GP superannuation payments are deducted from the monthly sum received from NHS England. The amount deducted is based on a form submitted at the start of the year estimating each GP’s superannuable income.
If this estimate is set too low, an additional amount is collected once the superannuation certificates are submitted. As a tax deduction is only allowed when the additional amount is paid, if superannuation returns are submitted or processed late, then the additional payment may fall in the next tax year or the tax year after that. Therefore, sometimes a GP may have to wait two tax years before receiving tax relief for their superannuation costs. This will lead to fluctuations in tax payments.
How We Can Help
We assist our GP practices with each stage of the superannuation process:
- We ensure that the superannuation estimate made at the start of each financial year is accurate.
- We submit the annual superannuation certificates at the earliest opportunity.
- We ensure our GP clients receive tax relief at the earliest opportunity.
Increasingly doctors are asking us how to deal with the annual pension savings charge and the mechanics of making a scheme election.
You will be liable to the annual allowance charge if your annual pension savings are more than the annual allowance for a tax year, taking into account any unused annual allowance brought forward. You will have to report the excess pension savings on your self assessment tax return. The amount of the annual allowance charge will be included in your tax calculation and you would normally have to pay the charge with your usual self assessment tax. However, you may make an election requiring the administrator of your pension scheme to pay the annual allowance charge on your behalf out of your pension scheme. There will be an appropriate reduction in your pension benefits. This is the ‘scheme pay election’. You need to ensure you fully understand the consequences for your pension benefits before you decide to make this election.
In order to make a valid election, you have to meet the following conditions:-
- You have to make the election within the time limit. For example, if you want your pension scheme to pay your annual allowance charge for the tax year 2013/14, you must make the election no later than 31stJuly 2015.
- Your annual allowance charge for the tax year must exceed £2,000.
- The amount of your pension savings in the NHS scheme alone must be more than your annual allowance for the year.
If you make the scheme pay election you will still need to make entries regarding your annual pension savings on your self assessment tax return. You will need to include an entry for the annual allowance charge, entries for the amount of the charge being paid by your pension scheme and the amount of charge being paid by yourself.
How We Can Help
- We can calculate the annual allowance charge.
- We can help you make the election requiring your pension scheme to pay the annual allowance charge.
- We can ensure you understand the consequence of making the election.
- We can ensure that HMRC acknowledge you have made the election and that your account with HMRC is credited with the payment made by your pension scheme.
Annually, GP’s are required to complete Certificates of Pensionable Profits (superannuation certificates). These forms allow doctors to certify their income for superannuation purposes. Calculating a GP’s income for these purposes is complicated. Mistakes can easily be made and any errors in this area will affect a GP’s retirement income.
Recently GP’s have also had to consider changes in the annual pension allowance and the lifetime pension allowance. The superannuation certificates have a direct impact on how these allowances are utilised. Exceeding these allowances may lead to additional tax liabilities. It is becoming increasingly important for a GP to understand the superannuation certificate and the impact on their retirement income.
As a firm of medical specialists, we complete many of these forms each year. We remain updated in this area, ensuring that our client certificates are completed correctly and that our clients’ retirement incomes are maximised. We ensure that the estimates of superannuation deductions made at the start of the financial year are accurate. If these are not accurate, shortfalls or overpayments of superannuation may occur. We submit the certificates as soon as possible after the end of the financial year and liaise with NHS England and the Pensions Agency to ensure that the correct superannuation contributions are recorded.
How We Can Help
Our superannuation services include:
- Estimating superannuation deductions at the start of the financial year.
- Completion of the superannuation certificates at the end of the financial year.
- Submission of the superannuation certificates.
Liaising with NHS England and the Pensions Agency over superannuation shortfalls or refunds.
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HMRC Compliant
Handing of all contact with HMRC.
Confidential Payroll Services
Guaranteed confidentiality.
Online Filing
Year on year continuity.
Pension Auto-Enrolment
Automatic incorporation of new legislation.
Clearcut Accounting was the missing piece of the puzzle.
Our GP practice has been working with Clearcut Accounting for our accounting needs and we couldn’t be happier with the level of service and expertise they provide. They have a deep understanding of the healthcare industry and the specific financial and compliance needs of GP practices. Their tailored approach and attention to detail have been instrumental in helping us make informed decisions and grow our business. They are always available to answer our questions and provide support when needed. We highly recommend their services to other GP practices.
Dr. S Abdi
GP practice– Liverpool
Clearcut Accounting has been a lifesaver for my growing business.
Working with my accountant at Clearcut Accounting has been a pleasure for our bakery business. They have a deep understanding of the unique financial and compliance needs of the food industry. Their advice and guidance on cost management, tax planning and compliance has been invaluable in helping us make informed decisions and grow our business. They are always available to answer our questions and provide support when needed. I highly recommend their services to other bakery and food business owners.
Stephanie Hughes
Founder – Vanilla
Accounting & Taxation
We provide a wide range of accounting and business services to General Practice.
Recurrent Annual Services
- Recurrent Annual Services.
- Preparing the annual accounts on a timely basis.
- Calculating the profit allocations.
- Preparing the partnership income tax return.
- Advising partners in advance of taxation payments.
- Preparing annual estimates of superannuation deductions.
- Preparing the partners’ annual Superannuation Certificates.
- Advice on superannuation shortfalls and surpluses.
- Meeting at your premises to discuss the annual accounts.
- Assisting partners in determining drawings levels.
- Unlimited telephone support for adhoc queries.
Non-recurrent Services
- Property acquisition or disposal.
- Advising on financial controls and safeguards.
- Advising on practice mergers and splitting.
- Budget and cash flow planning.
- VAT planning.
- IT training – QuickBooks and Sage…
- Inheritance tax planning.
- Capital Gains Tax planning.
- Tax investigation services.
