Rowleys Red Flag Alert – June 2021
18th June 2021
Welcome to Rowleys Red Flag Alert, a brief overview of topical issues for GP Practices.
Are you feeling flush (and not because you are overworked)?
Although it has been a tough 15 months in the healthcare sector logistically and emotionally there has, however, been some income protection and additional funding introduced to support practices through the pandemic.
If this increase in income has come without a significant increase in extra costs then some forward planning may be necessary BEFORE GP partners take extra drawings.
How does this impact the GP partners?
An increase in profits usually equates to higher tax and superannuation liabilities becoming due.
Depending on your practice year end and whether the practice or the individual GPs pay their tax, some forward planing is necessary to ensure enough cash is available to pay these liabilities by their due date.
March Year end
Many of you will have had/be receiving your draft year end accounts at the moment.
Your extra tax liability will be due by 31 January 2022 with increased instalments from July 2022 onwards.
The Superannuation balance will be due 28 February 2022.
Non March year end
Dependent on the month of your year end, you may be slightly affected by an increase of tax and superannuation in January/February 2022 respectively.
The biggest hit will likely come in the following year, with a large tax liability due by 31 January 2023 and increased instalments from July 2023 onwards.
The Superannuation balance will ordinarily be due by 28 February 2023. Due to the system of estimated pensionable profits it may, however, be prudent to pay some/all of this balance before 5 April 2022 in order to get any tax relief a year earlier.
Call to action
Discuss the implications with your accountant before drawing any extra cash from the business.
For further information on the above or to arrange a consultation, please contact Tanya Day firstname.lastname@example.org or Paula Swann Jones email@example.com or call 0116 282 7000. These overviews are guides only and cannot deal with any issue in great depth, so for personal individual advice or further information please contact our team. www.rowleysmedical.biz