How To Protect Your Medical Practice Against
– Making Tax Digital
10 Top Considerations and Implications For GP Practices
10 Top Considerations and Implications For GP Practices
For over 3 years, the accountancy profession has been trying in vain to get the government and HMRC to abandon their making tax digital initial.
MTD is the plan to get business to use some form of digital records, to report digitally through a platform that is linked to HMRC and to pay taxes quarterly instead of the current annual regime.
Are your systems ready for this? If you’re a VAT registered practice, then you really need to act quickly.
Even if your systems are ready, here are my questions for you.
Have you sat down and carefully analysed the impact of this on you and your practice finances?
Ok, have you sat down with your accountant to do this?
Has your accountant done this for you?
If you are both dispensing and non-dispensing medical practice and VAT registered it is vital to understand what is going to change and how it is going to change the record keeping of practice finances.
From April 2019 VAT registered practices will have to:
If your system is not compatible (for example excel or manual records), you may not be able to submit your VAT returns and risk incurring VAT surcharges.
Even if your system is compatible, have you considered how the system may link into your practice management system and steps to take to that ensure that confidential patient data protected?
Please note that even where your practice is under enquiry, HMRC do not have automatic right to see patients’ records.
4. If you have other income like rental income or self-employed locum income, did you know that all your different income streams will need to be accounted for on a quarterly basis?
5. Have you considered the increased administrative burden that you will face in keeping your financial affairs in order?
6. What about the quarterly payment of business income tax?
7. What impact will point 6 above have on your cashflow?
8. Can your current accountancy services cater for this and include regular cashflow forecast? Will this increase your accountancy fees?
9. If your system is not ready, how much of your time will be diverted away from the practice in dealing with this?
10. Will MTD give HMRC more tools to enquire into your practice?
We’re happy to meet for 45 minutes to see what recommendations we can give to generate further savings for you.