Tag: HMRC

Gp Locums Urged To Ensure Hmrc Compliance Or Risk Financial Penalties For Practices

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Locums risk falling foul of tax legislation

GPs locums and practices are running the risk of landing unexpected tax bills by not complying with tax legislation.

The warning, from contractor accountant firm Brookson, comes at the end of a year in which HMRC collected 9million in unpaid taxes from just 1500 medical professionals.

Experts are now warning GPs face a rise of 10k a year in tax bills.

With changes to PCT funding meaning that GP locums will be under even greater financial burden, Brookson, which specialises in accounting services for contractors, is looking to spearhead compliance in the medical industry by giving GP locums the advice they need to avoid unexpected tax bills and the potentially damaging reputational impact to their practice.

Martin Hesketh, managing director of Brookson, said:

It is clear that GP locums and practices are coming under the spotlight and working practices need to be 100 per cent compliant. HMRC is placing a strong focus on VAT, the declaration of business expenses, pensions and the employment relationship that exists between the practice and the locum.

Brookson have long been regarded as the employment status experts for independent workers. As HMRC turn their attention to the medical sector we are now looking to help promote compliance and provide guidance on employment status, promoting stability and longevity within the locum marketplace. Practices failing to ensure the employment status for locums they appoint is managed correctly could face substantial financial liabilities of unpaid tax and NIC, and embarrassment for all parties involved exemplified by the large amount of taxes repaid this year from the sector.

According to accountants for contractors Brookson many GP Locums use traditional high street accountants for their tax affairs; however with HMRC examining the working relationships of locums this is not something the industry is prepared for and our experience and research shows that many locum relationships are actually at risk of being seen as disguised employees by HMRC.

Brookson advises that complex IR35 tax legislation means accounts and working practices must be reviewed at more regular intervals with specialist help on IR35 compliance. Brooksons free guide to accounting explains IR35 compliance, employment status and what it means to you.

Brookson is helping to increase standards across the independent worker marketplace by co-founding the Freelancer and Contractor Service Association (FCSA) which has developed a code of conduct for members to help drive compliance across multiple business sectors in line with HMRC legislation.

-ENDS-

For more information, please contact Victoria McDonnell at Brookson Ltd.
Email: victoria.

Notes to Editors:

Brookson provides accountancy, tax and support services for self-employed professionals working on an umbrella basis, or running their own business either as a sole trader and or via their own limited company.

Brookson was launched 15 years ago by contractors, for contractors to provide advice and support to self-employed individuals to ensure they access the benefits they are entitled to, while working compliantly. Managed by a highly-qualified team of chartered accountants and former contractors, Brookson is committed to providing a first class service to its customers.

The independent worker market is highly legislative and the taxation side can be very complex. Throughout its 15 year history Brookson has used its specialism in independent working to guide its customers through the many changes in legislation, always ensuring they are operating compliantly whilst also optimising their tax position.

We are currently working with the BMA and Vocational Training Schemes to create a service for Locum GPs to ensure longevity and compliance within the market place and are now looking to engage with GP practices and Locums directly.

Inland Revenue P46 Tax Questions With Notes On Accepting The P46 Form

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A new employee may not have a P45 due to circumstances of first job, student, first employment in the current financial year, immigrant worker, P45 lost or perhaps not issued by a previous employer or issued late. If a new employee does not give the new employer a P45 on the day employment commences then the employer has a responsibility to ensure the new employee completes a P46 form

Completing the Inland Revenue P46 form is the method an employer uses to advise HMRC about the employment of a new employee who does not have a P45.

2. P46 forms should be sent to HMRC on the first pay day they are paid allowing a short period of time for a new employee who does not have a P45 to obtain one.

3. A new rule was introduced from 6 April 2008 if the employee has ticked either box A or B then the P46 revenue form does not have to be sent to HMRC until that employee earnings reach the lower earnings limit. PAYE records still need to be produced by the employer but official notification to HMRC is not required unless the lower earnings level is exceeded.

Should the earnings of the employee continue to be below the lower earnings limit then the earnings and employment would still be advised to HMRC on the P35 annual employers return.

4. If the new employee does not complete the Inland Revenue P46 form before the first pay day then the new employer should complete section one. Section one includes the employee name and address, date of birth and national insurance number.

5. If the employee does not have a national insurance number then the employer must also advise the job centre. It is important to advise the authorities when the employee does not have a number to avoid illegal employment laws. The P46 revenue form can still be submitted to HMRC without a national insurance number who have the facility to trace the number from the information supplied.

While preferable for the employee to sign the P46 form the P46 tax form can be submitted by an employer without the employee signature.

6. If the employee does not complete the P46 the employer must deduct tax using a BR tax code taxing all earnings and excluding personal tax allowances.

7. The tax code to be applied to new employee earnings is dependent upon when the employee joined and which of the boxes A, B or C are ticked on the P46 tax form.

If box A is ticked then apply the emergency tax code which from 6 April 2008 is 543L and after 7 September 2008 and the new tax code 603L. Tax is deducted on a cumulative basis. If box B is ticked then apply the emergency tax code which from 6 April 2008 is 543L and after 7 September 2008 and the new tax code 603. Tax is deducted on a week 1 or month 1 basis.

If box C is ticked then apply the BR tax code. Income tax is deducted on cumulative basis.

If none of the boxes A, B or C are ticked then apply the BR tax code and deduct tax on a cumulative basis.

8. If the new employee has ticked box D then student loan deductions should be made with effect from the first pay date provided the earnings level for deduction of student loans has been reached. Refer to the student loan deduction tables at Student Loan Table to determine how much should be deducted.

9. P46 forms can be filed online by an employer. When the Inland Revenue P46 form is filed online the employer should also have kept a record of how the information submitted was obtained.

10. Before the P46 Inland Revenue form can be filed online the employer must have obtained the facility to do so by registering with HMRC for a PAYE scheme. The HMRC website contains free software that can be used for this purpose.