Preparing for life as a dental associate

If you are in the process of securing your first Dental Associate post, or you have already started your self-employed career then the following accounting, tax and financial suggestions and recommendations will be relevant for you.  Dentist

Register as self-employed

You should register as self-employed with HM Revenue & Customs (HMRC) within 3 months of becoming self- employed to ensure you pay the correct Income Tax and National Insurance.

How do I pay tax and how much should I set aside each month?

You should pay HMRC direct. Tax payments are due at the end of January and July each year. If you become self-employed in August 2019 you may not have to pay your first tax bill until January 2021.

It is good practice to set aside 30% of your annual income for tax. Don’t forget that you will also have to pay Class 2 and Class 4 National Insurance through self-assessment and some of you may well have student loans to repay.

Do I need an accountant?

An accountant will act as your business and tax adviser. This will involve keeping you compliant with the law and tax regulations – submitting your annual tax return and preparing your annual accounts and providing you with advice on offsetting your taxable income with business expenditure. MACO TPL business advisory

So do keep your receipts and good records of your expenditure including any business or professional courses you attend.

Your accountant should have good working knowledge of the dental sector and be aware of the nuances that only exist for those working in the NHS. We would also recommend that your accountant is a member of the Institute of Chartered Accountants of Scotland.

If you are thinking about buying a practice, then your accountant will help you with sourcing funding, creating financial projections in terms of your business income and meeting your liabilities as they fall due and they will also help you to structure the business to minimise your future tax bills. Lenders will look for at least 5 years post-qualifying experience and a deposit of between 10%-25% of the purchase price.

Turning to your personal finances: mortgages, savings and protection

To get a mortgage, most lenders will require you to have 2 years of self-employed accounts as evidence of your income and your ability to repay the debt. The Help-to-Buy Individual Savings Account (ISA) is worth checking out as you save towards your deposit.

Cash ISAs are always a good option for those early in their dental careers – see our Tax Rate Card on maco.co.uk for the current annual maximum savings limits. 19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 15

You won’t pay any tax on the interest you receive from your ISA, nor will you have to declare it on your annual tax return.

For longer term savings, Stocks & Shares ISAs are also worth considering as part of your investment strategy as both capital gains and income will be tax free.

They are not suitable for everyone though, so do speak to us before investing.

If you arranged an income protection policy whilst still at university or at the start of your VT year you should review this policy to ensure the cover is still adequate. You should also make a Will and set up a Power of Attorney.

No one likes to think about dying, however, dying without a Will can leave those you leave behind with significant financial uncertainty. Scottish intestacy law is complex, archaic and can be unfair. So, don’t leave others to deal with your finances if you are no longer around or if you are unable to deal with them yourself.

Where can I get advice?

Martin Aitken & Co run financial and tax awareness sessions in association with Dental Schools for those beginning their dental careers.

We also regularly attend the FGDP (UK) Scotland Study Day in December, the Scottish Dental Show in the Spring and other BDS Undergraduate events during the year.

If you don’t catch us at one of the events, send This email address is being protected from spambots. You need JavaScript enabled to view it. an email with your queries and she’ll arrange a time to meet with you.