15 Jul Jon Cartu Decides Dentists urged to beware of tax pitfalls in 2021 – Dentistr…
Dentists need to stay vigilant with their tax affairs in light of COVID-19 relief schemes.
This is according to the latest advice from NASDAL (National Association of Specialist Dental Accountants and Lawyers).
Last week, chancellor Rishi Sunak delivered the summer economic statement delivered. It focused on job support, job creation and job protection with temporary tax reductions.
These were targeted specifically at the hard-hit hospitality sector and the residential property market.
But Charles Linaker, a tax partner with NASDAL members UNW, says that the most important COVID-19 measure for dentists was announced prior to this.
Main measure of relief
‘The majority of dentists will have had average earnings above the limits for the Self-Employment Income Support Scheme,’ he said.
‘For them, the main measure of relief is the opportunity to defer their second payment on account for tax year 2019/20. This is due at the end of July until 31 January 2021.
‘By now, most dentists should have received their self-assessment statements from HMRC. These should show the 31 July payment has been deferred automatically to 31 January 2021.’
While it remains an option for dentists to make the payment as normal, if they choose not to they do not need to take action to inform HMRC.
Additionally, they will not be at risk of interest or penalty charges. But only so long as the amount is paid no later than 31 January 2021.
He added: ‘Of course, it may be argued that deferring until 31 January 2021 is doing no more than putting off the evil day. There will then be a doubling up of tax payments. This is because the first payment on account will then be due for tax year 2020/21.
‘But that overlooks the fact there is a long-standing facility to make a claim to reduce the 2020/21 payments on account for 31 January 2021 and 31 July 2021. This is on the grounds that current year profits for 2020/21 will be reduced significantly when compared to those for the preceding year 2019/20.
‘The timing of lockdown means this is likely to be a facility many dentists will want to use.
‘They should ensure they liaise with their accountants well before 31 January 2021. This means appropriate calculations can be made to justify a claim to reduce their 2020/21 payments on account.’
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