dental news may 2016 - Albert Goodman

8 downloads 229 Views 1MB Size Report
CLOUD ACCOUNTING ... Top of page ... from April 2016 companies where the director is the sole employee are no longer abl
CHARTERED ACCOUNTANTS, TAX CONSULTANTS & FINANCIAL PLANNERS

DENTAL NEWS MAY 2016

Welcome to our biannual Dental e-update, in which we take a look at some topical issues that may be of interest to dentists, orthodontists and hygienists. You may have been sent this directly as an existing or potential client or you may have downloaded it from the Publications section of the Albert Goodman website, a convenient source of openly available expertise from the firm as a whole. Please browse through this month’s articles using the links below and contact us if any issues or questions arise.

CONTENTS NASDAL MARCH BUDGET HIGHLIGHTS CLOUD ACCOUNTING WORKPLACE PENSIONS & AUTO ENROLMENT 150TH ANNIVERSARY NHS CONFIDENCE MONITOR COMPASS

As members of the National Association of Specialist Dental Accountants and Lawyers, we have a more in-depth knowledge of accountancy and tax issues in the dental industry and are able to tailor our advice regarding your specific circumstances accordingly. BENCHMARKING STATISTICS The NASDAL benchmarking statistics are published annually in March, providing a detailed picture of dental practice finances gathered from the accountant members of NASDAL across the UK - who together act for more than a quarter of self-employed dentists working privately and in the NHS. The sample size is 650 principals and limited companies, and 600 associates. The basis of the survey figures is 2015 tax returns and accounts with year ends up to 5 April 2015. While the headline figures are made public and are summarised below, if you are a client then we are able to drill further into the detail to make comparisons with your own accounts, highlighting areas of possible over- or underperformance compared to similar practices or to other associates. NASDAL released the following highlights which have since been widely reported in dental media: „„ An average private practice made a profit of £140,129 per principal, compared to an average NHS practice profit of £129,265. „„ Across all types of practice, average turnover grew at a rate of 4.4%. „„ Private practices have seen an increase in fee income of over 8%, while NHS practice income has been relatively static. „„ Costs seem to be static across all practices. „„ Associates’ average profit of £68,024 represented a slight decrease on the previous year’s £68,544. There is a wealth of detail available and if you would like more information in the context of your own dental activities then please contact us. GOODWILL SURVEY The quarterly goodwill figures are collated from accountant and lawyer members of NASDAL in order to give a useful guide to the practice sales market. Those announced in April 2016 relate to the quarter ending 31 January 2016. These statistics should be treated as a guideline only: „„ The average goodwill value for practices being sold with an NHS contract is 153% of turnover; up from 140% in the previous quarter. „„ Mixed practices have seen the average goodwill rise from 104% to 123% in only nine months. „„ Private practices have remained reasonably steady seeing an average goodwill figure of 84% - up from 76% at the end of October 2015. We are experienced in representing both the seller and the buyer, and if you would like to explore your ideas further then please contact us. Furthermore, since our last edition of Dental News, NASDAL has announced the launch of a new sale agreement for use by both buyer and seller in practice sales. The new agreements reflect NASDAL members’ experience and expertise in the dental field and it is hoped they will save dentists both time and money in practice sales where both lawyers are NASDAL members. Top of page

MARCH BUDGET HIGHLIGHTS We have issued a full publication on this topic, which can be found at www.albertgoodman.co.uk but have highlighted below, some key issues that may impact our dental clients. NEW SOFT DRINKS INDUSTRY LEVY The budget announcement that has led to the most headlines in the dental press is the introduction of a new soft drinks industry levy to be paid by large producers and importers of soft drinks that contain added sugar. The levy will be charged on volumes according to total sugar content, with a main rate charge for drink above 5 grams of sugar per 100 millilitres and a higher rate for drinks with more than 8 grams of sugar per 100 millilitres. It is proposed to introduce the measure from April 2018. It would appear that the main intention of the sugar tax is to reduce the incidence of obesity and diabetes, particularly in childhood, with funding flowing through to improve sports provision in primary schools. Dental professionals seem to welcome the additional likely benefit of reduced levels of dental decay in children. However, perhaps an opportunity is being missed to channel specific additional funding into educating the public with the oral health implications of sugary drinks. What do you think? If you would like to share your opinions with us, we would always be interested to broaden our understanding of issues like this that are important to you but don’t necessarily affect your cash flow, profits or tax directly. EMPLOYMENT ALLOWANCE The NIC Employment Allowance was introduced from 6 April 2014. It is an annual allowance which is available to many employers and can be offset against their employer NIC liability. However, practices with more than 50% NHS income should already be aware that they are ineligible. From April 2016, the government has increased the NIC Employment Allowance from £2,000 to £3,000 a year. The increase means that businesses are able to employ four workers full time on the new National Living Wage without paying any NIC. To ensure that the NIC Employment Allowance is focused on businesses and charities that support employment, from April 2016 companies where the director is the sole employee are no longer able to claim the Employment Allowance. EMPLOYEE BENEFITS AND EXPENSES CHANGES From 6 April 2016 a number of changes have been introduced relating to the tax treatment of employee benefits in kind and expenses: „„ There is a statutory exemption for certain expenses, such as travelling and subsistence expenses, reimbursed to an employee. This replaces the current system where employers have to apply for a dispensation to avoid having to report non-taxable expenses (on forms P11D). „„ Employers are able to include taxable benefits in pay and thus account for PAYE on the benefits through the year, rather than after the year end via the P11D process and amendment to coding notices. However, in order to payroll benefits for 2016/17, employers needed to register with HMRC for the service before the start of the new tax year. Employers will then not have to include these payrolled benefits on forms P11D but will need to still report them on the P11D(b). „„ The £8,500 threshold below which employees do not pay income tax on certain benefits in kind has been removed. TAX ON DIVIDENDS Changes to dividend taxation have now been widely publicised. Basic rate taxpayers in particular need to appreciate that all dividends received still form part of the total income of an individual. If dividends above £5,000 are received, the first £5,000 will use up some or all of any basic rate band available. The element of dividends above £5,000 which are taxable may be taxed at 7.5% or 32.5%.

Whilst some savers will benefit under the new rules, many company owners will be penalised, with tax savings offered by operating through a limited company, compared to as an unincorporated business, diminishing in many cases, although this could improve once corporation tax rates begin to fall, on the assumption that dividend tax rates remain at their current levels. This will have a specific impact on those who have incorporated their practices and needs to be factored in for those currently considering the incorporation route. CORPORATION TAX RATES Also of interest to incorporated or incorporating dentists is the reduction in the main rate of corporation tax as follows: „„ 19% for the Financial Years beginning on 1 April 2017, 1 April 2018 and 1 April 2019; „„ 17% for the Financial Year beginning on 1 April 2020. Top of page

CLOUD ACCOUNTING Since the last Dental News, there have been a number of developments in this area. Firstly, Albert Goodman has been awarded the prestigious ‘Gold Partner’ status from Xero (see full article here). The first South West business awarded the status, Albert Goodman has signed up more than 100 SME clients to the new platform. Gold Partner status means Albert Goodman is now officially recognised as Xero software experts. Albert Goodman has 18 certified Xero Advisors across its six offices, who are experts at maximising the software. Several dental clients have already signed up and are either using the software themselves or are Outsourced Accounting Services clients for whom we undertake the bookkeeping. Secondly, in recognition of the firm’s commitment to this rapidly evolving technology, our long serving colleague Clare Blackmore has been appointed as Director of Cloud Accounting. This is a firm wide role to make sure we capitalise on the benefits that cloud accounting brings to us as a firm, but more importantly to our clients. Thirdly, we have strengthened our depth of knowledge and training in the alternative cloud accounting offerings from the more familiar QuickBooks and Sage brands. Cloud accounting is changing the world of accounting and bookkeeping. In short, this is where your business data is stored remotely rather than on standalone desktop computers. Cloud accounting software is designed to save you time and money. The software is accessed via the internet so there are no installation or update issues and you are always using the current version. As well as convenience, there are also cost benefits of cloud accounting. Traditional desktop software normally involves an upfront fee to purchase the software and then adhoc charges for updates. With cloud software, everything is covered by a monthly subscription. For dental clients, we see this as an exciting development offering a new way of maintaining your accounting records and for Associate Dentists, this may offer a simple solution to keeping those records needed to prepare accounts and tax return forms. Whether you use the software yourselves or we use it on your behalf, we are able to monitor and review your records periodically or on request, leading to a more proactive service. If you would like to find out more about how cloud accounting and/ or outsourced accounting might suit your own situation, please let us know and we can establish with you some of the most relevant potential benefits. Top of page

WORKPLACE PENSIONS & AUTO ENROLMENT We have been discussing this topic with our clients for some time now, but if you feel that this an area with which you would like additional support please let us know.

The rollout started in October 2012. There are different staging dates up until April 2017, depending on how many employees you have and your PAYE reference number. The Pensions Regulator contacts you twelve months, and again six months, before your staging date so this is already likely to be on your radar. If you are an employer but have not heard from the Pensions Regulator, then it may be worth making your own enquiries as to why, but we will of course assist you where possible. Top of page

150TH ANNIVERSARY The firm is celebrating its 150th anniversary this year. Albert Goodman is a firm steeped in history and we are proud of our heritage and independence, continuing to uphold the same values that made us the success we are today. We are a full service accountancy, tax, financial planning and business services firm, our 240 plus people help our clients cut through the complexities of modern business by explaining issues in a straightforward and understandable way and giving simple but effective ideas. We believe that it is these principles – the same principles that we have upheld for 150 years in business – that ensure personal and family clients feel comfortable opening up to us and planning for their future. Today, we are viewed as one of the largest accountancy and business services firms in the South West, with offices in Taunton, Yeovil, Chard, Weston-Super-Mare, Bridgwater, Weymouth, Wedmore and Burnham-on-Sea. The Albert Goodman philosophy is simple: we aim to contribute most to our clients’ success. Top of page

NHS CONFIDENCE MONITOR The results from the third survey were recently released, with one of the most striking responses being to a new question about recommending the dentistry profession to friends and family – only 30% would. Combined with the other new question about planned retirement age coming out with an average response of 60 for all dentists, there is the possibility of a staffing crisis in the future. Six other questions regarding confidence comparing now to twelve months ago revealed 74% to 91% of respondents felt less confident. Did you take part in this survey? Do the results reflect your view? Top of page

COMPASS The acronym stands for “Contract management, payments and superannuation system”, which is the latest stage of the NHS Business Services Authority modernisation program. It aims to combine the Dental Portal (released in 2013) and POL (payments online) under one system. As with most national IT projects, there would appear to have been teething problems (pun intended), with a range of consequences for users. If this is relevant to you, what has your experience been, particularly in relation to your year-end tasks? Do you have confidence in the resulting payments and superannuation figures or have there been specific issues that are either resolved or unresolved? Top of page

CONTACT If you would like to arrange an initial no-obligation meeting, at no cost, to discuss any of the matters raised in this newsletter, or to find out how Albert Goodman can benefit you or your practice please do not hesitate to contact Nick Hancock on 01823 286096 or [email protected] Our Dental team at Albert Goodman: Nick Hancock

James Wade

Partner

Senior Dental Accountant

Dental accounting

Tara Hayes

Andrew Brown

Tax Manager

Financial Planning Partner

Personal and business tax

Investments, wealth protection and pensions (incl. NHS pension scheme)

Neil Hutchings

Tom Lock

Senior Manager

Trainee Dental Accountant

Financing, valuations and buying and selling practices

Clare Blackmore

Tabatha Marshall

Director of Cloud Accounting

Outsourced Finance Manager

www.albertgoodman.co.uk TAUNTON

YEOVIL

CHARD

WESTON-SUPER-MARE

SEDGEMOOR

WEYMOUTH

BURNHAM-ON-SEA

WEDMORE