Newly self-employed – now what?
Congratulations! After years of hard work, you are now a newly qualified associate dentist. Transitioning to self-employment is an exciting step, but it comes with several important considerations.
Do I need an accountant?
Yes, an accountant can be invaluable. They will register you with HMRC, ensuring you’re set up correctly to complete your first tax return. An accountant can also address your initial questions and guide you through the process.
When is my tax return due?
Tax returns cover the period up to 5 April each year, and they must be submitted and paid by 31 January of the following year. Submitting your information to your accountant promptly after 5 April will help you understand your tax liability early and plan your payments.
How much should I budget for my tax liability?
You are taxed on your profits (income minus tax-allowable expenses) at rates between 19% and 48%, depending on your profit level. We recommend setting aside one-third of your monthly income for taxes. Payments are not made on a monthly basis, so this amount should be saved in a separate account until payment time comes around. Your first year’s tax bill will be double, so you will need to budget for this.
What records do I need to keep?
Maintain detailed records of your monthly earnings, including gross income and deductions (e.g., lab fees and superannuation). Keep receipts for business expenses such as equipment, subscriptions, and courses. Only claim travel expenses if travelling outside your dental practice. If you have other income sources, keep those records as well. Store all this information in an organised manner, either digitally or in a folder, but always retain original schedules and receipts.
At EQ Healthcare, we ensure your tax affairs comply with current legislation and provide comprehensive advice on other business areas. This allows you to manage your tax returns without stress. For more information on our services, contact our team or visit our website: www.eqaccountants.co.uk
Samantha Laing
Supervisor, EQ Accountants
T: 01307 474274
E: samantha.laing@eqaccountants.co.uk
W: www.eqaccountants.co.uk