The technical team here at Humphrey & Co have condensed Mr Darling’s lengthy Pre-Budget report into a handy summary. Find our article here:

“Click Here for Humphrey & Co 2008 Pre-Budget Report Summary”

HM Revenue & Customs have introduced a new dedicated Business Service. If you are worried about being able to meet your Tax, National Insurance or VAT liabilities, you can call the new ‘Business Payment Support Line’ on 0845 302 1435 (Open Monday to Friday 8.00 am to 8.00 pm, Weekends 8.00am to 4.00pm)

The information that you will need to have at your finger tips is:
1. your tax reference number
2. details of the tax that you are having (or will have) trouble paying
3. basic details of your business income and outgoings

The idea is to contact the Support line before the tax becomes due and then in most cases a decision should be able to be made in about 10 minutes as to temporary options of payment tailored to your business needs.

Although interest will continue to be payable on taxes where it applies, where the tax is paid late, no additional late payment surcharges will be applied on payments made in an accordance with your arrangement.

If you would like further information a direct link to the website is www.hmrc.gov.uk/pbr2008/business-payment.htm

At Humphrey & Co we are always at the other end of the phone to help clients through difficult periods. Please ensure that you contact us soon as possible if you consider you are going to have problems meeting any tax liabilites.

In our most recent newsletter, we asked our clients to send in their tips and advice for helping to relieve the pressure of the ‘Credit Crunch’ – Anything from how to save cash on expenses to ways to improve cashflow or increase sales.

One of Humphrey & Co’s clients has come up with a simple, cheap and effective method of receiving payment sooner from their debtors…

…By simply sending all invoices out on red paper instead of white, invoices are being paid much faster than in previous months, as their clients attention is drawn to the “Red Bill” which has arrived.

Please contact us if you have any tips you’d like to share with us!

Superannuation
Do not opt out of the NHS Superannuation Scheme. If anyone tries to talk you into opting out speak to your accountant immediately.

Goodwill
Current thinking values goodwill on Dental Practices at approximately 35% to 40% of gross fees. There are however many factors that can increase or decrease the value. Whether buying or selling a practice always contact your accountant for advice.

Associate Agreements
A good Associate can add substantially to practice profits particularly if they are working under the correct type of Associate agreement. Cost sharing agreements are now in vogue and many of our clients, both Principals and Associates, have benefited from introducing this type of contract. We can recommend Solicitors that specialise in dental contracts.

Tax Payments
None of us like paying tax but unfortunately we have little choice in the matter. Principals and Associates should ask their accountant for an estimate of their tax as far in advance as possible. We suggest that you should save monthly for your tax. Principals should budget according to their accountant’s projections. Associates should save at least 25% of their monthly cheque towards their tax bill. We suggest you put the money into a high interest savings account (and remember to use your annual ISA allowance!) and make it work for you. ASSOCIATES BE WARNED: Your first tax payments may be quite low but you will eventually have to make a ‘catching up’ payment. Remember that failure to pay tax at the proper time will be very expensive in terms of interest and penalties.

NHS Schedules
When you receive payment from the DPB the accompanying schedule includes all FP17s up to approximately 6-7 days previously.Your accounts should include a figure for FP17s not paid at the end of your accounting year. Many Dentists and Accountants overlook this point. HM Revenue and Customs do not, and in an investigation this omission will count heavily against you.

Private Patient’s Charges
Are you charging the correct hourly rate? Speak to other dentists in your area to find out what they are charging.

Hygienists
Are hygienists employed or self-employed? Broadly speaking we are of the opinion that if a hygienist works at more than one practice he/she can usually be classified as self-employed. It is important that a proper self-employed contract is in force and adhered to. If in doubt speak to your accountant. Incorrect classification could prove expensive for you! We can recommend a Solicitor specialising in dental contracts

Practice Loans and Personal Borrowings (Including Mortgages)
Generally speaking you receive tax relief on interest paid on practice loans. You do not usually receive tax relief on private loan interest. If your Capital Account balance shows a positive figure there may be scope for refinancing your private loans into practice loans. Speak to your accountant. There could be considerable tax savings to be made.

Associate’s Pay
We have come across many instances where Associate’s pay has been incorrectly calculated. Both over and underpayments have occurred. The most common problem arises because of the mistreatment of Superannuation and Levies. Speak to your accountant to obtain an example of an Associate’s payslip setting out the correct treatment of NHS schedule deductions.