Money Matters

Annual tax returns – submit, or not submit?

If you have a private practice, you will need to submit annual tax returns.

If, however, you rely solely on your NHS salary, you may have received a cheerful letter from the Revenue (HMRC) stating that you no longer need to submit annual tax returns.

This has got to be good news hasn’t it? No, not necessarily. For one thing, should you have a tax liability the onus is still on you to report it to HMRC. This may seem a little surreal – you have a document saying that you need not submit a tax return, but this gives you no protection whatsoever in the event of having an unexpected tax liability.

The other thing to remember is that the tax return is how most of us claim for work-related expenses. We all know that the scope for claiming is small when compared to what you can do through a private practice, but you will still be paying for various professional subscriptions and your insurance, and these can be offset against your NHS income.

If you stop filling in tax returns you may soon find that HMRC ‘overlook’ your expenses and you are hundreds if not thousands of pounds out of pocket. You can inform your tax office that you wish to claim relief, but this can be a struggle.

So, being released from the self-assessment tax system could be a case of ‘one step forward, two steps back’.

John O’Leary is a specialist in the taxation of hospital consultants. He has recently joined Medic-Tax from Sheen Stickland, and can be contacted on [email protected]

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One Response to “Annual tax returns – submit, or not submit?”

  1. DILLI says:

    Does a nhs consultant need to register as self employed/sole trader with HMRC for private practice income?

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