Thursday 23 August 2012

GPs can claim expenses - guide

As self employed persons GPs can claim personal expenses which are incurred wholly and exclusively for business which can reduce their tax liability.

Motor Expenses
A percentage of all expenses relating to running a car can be claimed, these include petrol, insurance, road tax, servicing, repairs and cleaning. If your car has been purchased on hire purchase or you have a loan, then a percentage of the interest can also be claimed. The percentage claimed must reflect the business use element of the car. Traveling from home to the surgery is private use and only journeys to patients homes, hospitals and other work related places can be claimed. 

Capital Allowances on cost of Motor Car
A claim can be made for the wear and tear of the vehicle, this is known as capital allowances. This is calculated based on 20% reducing value of the car or if over £12,000 then the capital allowances are restricted to £3,000p.a until the value of the car falls below £12,000. 

Professional use of home
A claim can be made as the majority of GPs will do some work at home. There are various ways to claim, some accountants use a fixed amount per week, others calculate it specifically using a percentage of the running costs of your home. Many GP’s think that if they do claim, there is a capital gains implication when they sell the house. This will not be the case as long as the room is not used exclusively for work

Telephone and Computer Expenses
A claim can be made for the use of home telephone, mobile, use of a computer at home and internet costs if these are used for business purposes. Only the business use element of the costs can be claimed.
Courses and conferences (including travel and accommodation)
These can all be claimed in full, as long as, you do not tack a holiday or sightseeing onto the end of the trip. 

Spouse’s salary
This can still be claimed but only in certain circumstances. Firstly, your spouse must be helping you with your work and you must pay them the salary, preferably, monthly. It is recommended that you have a job description, indicating the type of work and number of hours worked a week. The pay should be realistic for the work done. It is always an area that Inspectors like to look at, so set it up correctly. 

Other Expenses
A claim can also be made for medical subscriptions, drugs and instruments, medical books, journals, postage and stationery. You can not claim for clothes that you wear to work, instead you can claim the cost of dry cleaning.

Recording Keeping
You must keep all invoices relating to any claim for tax purposes for the minimum of seven years. However, if receipts have been lost reasonable estimates can be made.

One of the simplest ways of keeping some of your records, particularly motor expenses, is to have a separate credit card. The Inland Revenue will accept the statements as evidence and this will at least mean you have a record of expenses if you lose the receipts. The credit card should be used for as many business related items as possible.

Economia

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