Specialist advice for Consultants

Whether you are working privately or in the NHS or a combination of the two, you need to be sure that you are organising your affairs to minimise your taxes and ensure your pension is secure.

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As a consultant, what is the best way to be paid?

Helping you make the right choice

It is important to know which legal structure is most appropriate for your private income.

There are four structures to choose from:

  1. Sole trader
  2. Partnership
  3. Limited liability partnership
  4. Limited company

By selecting the right legal structure for your private income you could:

  • Divide your income with a spouse or civil partner
  • Reduce tax rates to nil, 20% or 40% rather than 45% or 60%
  • Reduce National Insurance contributions altogether
  • Shelter income in a limited company where corporate tax rates are currently 19%.
  • Help reduce the tax charge on the growth of your NHS pension

Should I be a Limited Company?

A limited company is not always the best choice for all consultants. The legal structure which is right for you depends upon your financial and personal circumstances.

‘Off payroll’ Working Rules (IR35)

The ‘off payroll’ working rules were introduced to the NHS from 6th April 2017.

NHS authorities must now consider whether these rules apply to anyone working for them through a limited company, an umbrella company, or an agency.

The practical outcome of these new rules means that it is now far less tax efficient for a consultant to work for a hospital, CCG or an NHS Trust through a limited company or an umbrella company.

We now generally recommend that a consultant working for one of these organisations opts to be paid through the organisation’s payroll. Utilising a limited company or umbrella company will result in a minimal or no saving.

We will discuss your circumstances before you accept a new appointment and let you know if the “off payroll” working rules will apply to you.

We will help you decide if there is any alternative to being paid in this manner.

If you do work through a limited company and are paid under the IR 35 (‘off payroll’ working rules) we will help you unravel your corporation tax and income tax returns and advise on any tax bills.

Consultants working together

We advise many consultants who work together in private practice. Often we will recommend they work through a Limited Liability Partnership (LLP).

LLP’s have several commercial and tax advantages:

  • LLPs limit the personal liability of individual consultants.
  • LLPs are very flexible. This is helpful in the allocation of profits and in tax planning.
  • The partners or members of an LLP can be the individual consultant or a limited company controlled by the individual consultant. Again this can be very helpful in tax planning.

We advise on all accounting and tax aspects of limited liability partnerships. We also advise on LLP partnership agreements considering particularly the profit split between partners and expenses.

How we can help

We have considerable expertise and experience in this area.  We have advised many consultants how to substantially reduce their tax bills by choosing the right structure.

 

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Contact us for specialist medical accountancy services for Consultants

If you’re looking to plan your finances for the future or trying to find an answer to a problem then get in touch today.

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NHS PENSION REVIEW

Are you in danger of being hit with a huge tax bill on your pension growth? Our NHS Pension Review Service can provide an advance warning of impending pension issues.

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TAX ENQUIRY PROTECTION

HMRC have increasingly got GPs in their sights and many Practices have been subject to lengthy tax investigations. Make sure you’re covered with our annual insurance scheme.

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EXPERT CONSULTATION

Talk to one of our Medical Accounting Team for free. We can discuss your circumstances and how we can help you achieve better financial management, reduce your tax bills or plan for the future with a tailored fixed price plan.

Meet our team

We have a panel of subject experts and a team of professional accountancy support staff to make sure your specific needs are met reliably and cost effectively.

HOW WE CAN HELP

A specialist healthcare team to advise you
Call free for support at any time
Keep you up to date with the latest changes
No fuss, smooth process to change to us
Members of AISMA - Association of Independent Specialist Medical Accountants

What our clients say…

Dr David Paige, Consultant Dermatologist, The Holly Private Hospital

The reason I was first attracted to Nichols was when I heard Mr Nichols explain the complexities of the Life-time allowance and the Annual allowance changes in simple terms. I have had no regrets using this firm as they are very trustworthy and honest.

They also sorted out my allocation of rental income to my partner correctly which I had been badly advised on before by a very large and well known accountancy firm.

They respond in a timely manner to queries and (politely) chase me up over submitting my tax return details. I would recommend them to anybody in the medical profession.

Dr Colm Irving, Consultant Anaesthetist

Nichols and Co have done two things for me which have changed my financial life. They advised me to incorporate my practice and introduced me to online accounting using XERO. Both these moves have saved me time, money and stress. If I do get stressed Danny Woodham is immediately available on the end of a phone or an email.

Dr Miguel Plaza, Consultant Paediatric Anaesthetist, Kings College Hospital

I have been with Nichols & Co since the beginning of my career and there is a reason for that. Not only they do their job very well, they simply care for you, because you become part of the Nichols family and this is what makes them unique. They will look after you so well, that you will never want to leave. If you want the best, you want Nichols & Co.

Dr Dimitri Amiras, Consultant

I first started using Nichols and Co in my first year of doing private consultancy work. I found them to be professional, responsive and knowledgeable. It can be quite stressful when you are faced with confusing tax and especially pension rules when you start as a consultant. However, I've always found them able to explain and guide me through the complicated process.

Dr Andrew Plumb – Consultant

I received a recommendation from a colleague for Nichols & Co over 5 years ago and have been with them ever since, initially with Debra and subsequently Danny being my accountant.

They have consistently been responsive, efficient and clear in all communications, whether via phone, email or using their secure online portals. All requests are dealt with rapidly and with a deep understanding of modern hospital medicine including private practice.

I’ve received excellent advice on all matters of taxation and expenses, practice structure, allowances and the NHS pension (including the taper and annual allowance charges). I would definitely and strongly recommend them.