Medics Money podcast

Dr James Somauroo tells us about his journey from Junior doctor to healthech guru. We talk about "Quitting" medicine How to switch career How can the latest health tech run on NHS computers The sleeping habits of new puppies Clubhouse  Windows 95 - under rated OS Biggest financial mistakes Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney  

What are the essential checks that all doctors need to perform on their March payslip to help spot pension errors? What are the common errors that occur with pension records? What is the effect of dropping PAs on income and retirement? How much will your pension pay in retirement? Tom Skinner also tells us about  his  own podcast which is well worth a listen https://barnabycecil.com/podcast Contact Tom here https://www.medicsmoney.co.uk/accountant/barnaby-cecil-financial-planning-limited/ Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney  

HOW MUCH!!! do Australian doctors get paid? Dr Carl Kennedy - an Australian paediatric cardio thoracic anaesthetist from "Ramsay Street" currently working in the UK.  Whats the difference between working in the UK and Australia? Who gets paid more, UK doctors or Australian doctors? SPOILER the difference in pay is absolutely staggering. Would Dr Kennedy rather be a patient in the UK or Oz? What challenges do IMG face when coming to the UK? Will Dr Kennedy be staying in the UK or returning to Australia?  Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney  

NHS Pension age discrimination case - What doctors need to KNOW and need to DO. Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney Contact Rachael Hall IFA here https://www.medicsmoney.co.uk/accountant/sandringham-medical/ Contact Andy Pow Accountant here https://www.medicsmoney.co.uk/accountant/mazars-llp/    

All the latest news on what the governments recent budget means for doctors.  Resources mentioned in the episode include https://www.medicsmoney.co.uk/tax-thresholds-doctors/ Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney   Budget Podcast So we thought we would give a brief summary of the recent Budget given by Rishi Sunak recently on the 3rdMarch. Governments require parliament’s approval to spend money, as well as to raise revenue in the form of taxes and the budget is usually one of the centre pieces of the Governments legislative programme. The measures announced become the Finance Act for the year. It is deemed that a Government has to be able to pass its Budget because if they do not it is seen as a vote of no confidence and the Government will then have to call an election. It is also important to pass the budget or at least a pared down version because both income tax and corporation tax are temporary measures and have to be reapproved each year. In election years there are often two Finance Acts – one pre election to make sure we lucky taxpayers get to keep on paying income tax and one afterwards with most of the other stuff. A Chancellor delivering his or her budget is the only person who is allowed to drink alcohol in the chamber of the House of Commons and you wouldn’t really blame Rishi if he had a glass of something strong next to him. It was an unenviable budget to have to give given that the UK has seen the biggest fall in GDP for over 300 years exceeding those seen even in wartime. The country is set to borrow a peacetime record of £355 billion this year. The challenge Sunak faced was building a recovery and raise money while at the same time trying to meet the Conservatives’ election promises not to raise the main rates of income tax, VAT and national insurance. Personal Tax Let’s start with Personal Tax which basically remains what some have called a “frozen landscape.” As mentioned above, the Chancellor’s room for manoeuvre was limited. Income tax rates have remained exactly the same at 20,40 and 45%. What he did do to raise revenue was freeze the personal allowance, the tax free amount that the vast majority of us get each year. In the current tax year that we are in – the 2020 to 2021 tax year that ends on the 5th April 2021 the personal allowance is £12,500. There will be a small increase for the next tax year, that is 2021 to 2022, with the personal allowance going up on 6 April 2021 to £12,570. It was thought that the Chancellor would axe this increase but apparently the increase has already been coded into payroll systems so would have required expensive changes if he had done so. From April 2022 the personal allowance will remain at this level £12,570 until the 2025-2026 tax year. For those of you who have listened to our tax code blog – and if you haven’t please do check it out after this – you will know that the most common tax code for taxpayers as of 5 April 2021 will be 1257L. Don’t forget that this will only be the case if the taxpayer is not claiming a deduction for their professional expenses and I’m sure that everyone listening has done so. If you haven’t please check out our podcast or blog on claiming back tax on your professional expenses. As well as the personal allowance, the rate at which people start paying the higher rate of income tax that is 40% will increase to £50,270 and then also be frozen. The threshold at which an individual starts paying the additional higher rate of 45% remains at £150,000 and has not been increased at all. This will raise revenue by what is called fiscal drag – as people get payrises in the future, more people will start earning over the personal allowance and start paying tax and more people will move into the higher rate tax bracket. There had been suggestions that tax rates on the self-employed might increase, which would include many GP locums for example, but in the event no announcement was made. What was announced recently is a 1% pay rise for NHS staff including some doctors. In the podcast we talk about why inflation means this 1% rise is almost certainly another pay cut. We talk about how some doctors pay has fallen by 30% over the last 10 years in real terms. National Insurance Moving onto National Insurance, again much of this remains the same. We have a long detailed podcast on National Insurance so I won’t go into it too much. As the NIC Class 1 upper earnings limit and the Class 4 upper profits limit are aligned with the income tax higher rate threshold, they too increase next year to an annualised level of £50,270 and will be caught up in the freeze. Hopefully people will recall that Class 1 National Insurance is paid by employees via PAYE and Class 4 National Insurance is charged on the profits of self employed individuals. Pensions The lifetime allowance is unchanged at £1,073,100 and will remain at this level until 5 April 2026. As people should know where pension funds have been built up and the capital value exceeds this lifetime allowance, a tax charge will be levied on the excess called a “lifetime allowance charge”. This has proven to be quite controversial - by freezing the life time allowance this does make it more likely that people will exceed the allowance and face a tax charge. The BMA have been particularly vocal regarding this calling it an “unfair tax on doctors” and reporting that 72% of 8,000 respondents agreed that freezing the Lifetime Allowance would make them more likely to consider retiring early. It is argued that the NHS pension scheme is not flexible enough to allow doctors to vary and manage their contributions making it harder to keep working without facing a potentially large pension tax bill as a result.   For completeness I should say that the annual allowance limit is unchanged at £40,000.  On the podcast we discuss in more detail how taxation policy affects behaviour. Sooner or later the high rate of tax at the margins will alter doctors behaviour and this will be a disaster for the NHS.   How much money will you take home for doing a locum shift or waiting list initiative? Probably a lot less than you think because you will be paying tax at your marginal rate. Read more about marginal rates of tax here  https://www.medicsmoney.co.uk/tax-thresholds-doctors/  Capital Taxes The Chancellor also took the opportunity to freeze other allowances including the annual allowance for Capital Gains Tax and the Inheritance Threshold which you are the tax free allowances for those taxes. Corporation Tax Corporation Tax was one of the few taxes that the Chancellor had room to alter and indeed he did. Currently the UK has a corporation tax rate of 19% on profits for all companies. The Chancellor announced that the rate of Corporation Tax will increase from 1 April 2023 to 25%. However the existing rate of 19% will continue to apply to small companies, that is those with profits of up to £50,000. A tapered rate will apply to those with profits between £50,000 and £250,000. We get asked all the time by doctors as to whether or not they should set up and trade using a company and I would strongly encourage those people to listen to our recent podcast on this but of course this change in the corporation tax rate may now make setting up a company less attractive   Investments Finally, just to say a little bit investments. The ISA annual subscription limit has been held at £20,000. The Junior ISA annual subscription limit and the Child Trust Funds annual subscription limit both remain at £9,000. We also released a podcast on tax reducers which are government approved schemes that reduce an individual’s tax liability if the individual invests in them. So we talked about the Enterprise Investment Scheme and the Venture Capital Trust Scheme among things. These have not been changed by this budget. What I really wanted to say about these is that we mentioned the Social Investment Tax Relief scheme which provides tax benefits to those who invest in qualifying social enterprises. This was due to expire on 5 April 2021 as we reported in our podcast but it has been granted a reprieve and has been extended for a further two years to April 2023. So there we have it, a brief overview of some of the more important parts of the March 2021 budget that will affect doctors and other healthcare professionals.      

On todays episode we are joined by Dr Zahid Bashir who shares his top financial tips that allowed him to build a successful career as a doctor in pharma.  Zahid shares his top financial tips that allowed him as an IMG with just £500 in his pocket to build a comfortable life for him and his family. We talk about all the basics, spending less than you earn, saving, paying down debt and investment strategies. We also talk about Medics Money free ebook that can help you to improve your own finances. Download it here https://www.medicsmoney.co.uk/ebook/ Want to stay up to date with the latest financial information for doctors? Join 24,000 doctors receiving free financial CPD via email by downloading our free ebook here https://www.medicsmoney.co.uk/ebook/ Follow us on Twitter  https://twitter.com/medicsmoney Like us on Facebook https://www.facebook.com/medicsmoney Contact Dr Bashir on LinkedIn here          linkedin.com/in/zabashir         

Should doctors and dentists use a limited company to save tax? It's one of the most common questions we get asked on Medics' Money. We talk about who can benefit and why. We also talk about how favourable BIK rates can make buying a fully electric car like a TESLA cheaper.  Calculations relevant to the podcast below https://www.medicsmoney.co.uk/ltd-company-calculations/   Join 24,000 doctors receiving free financial CPD like this by downloading our ebook   https://www.medicsmoney.co.uk/ebook/   Subscribe to the Medics Money podcast here   Apple – http://tiny.cc/MMapple   Spotify – http://tiny.cc/MMspot   Google – http://tiny.cc/MMandroid    

Tax reducers for high rollers including discussion around Venture Capital Trusts and  Enterprise Investment Scheme. Join 24,000 doctors receiving free financial CPD like this by downloading our ebook https://www.medicsmoney.co.uk/ebook/   Subscribe to the Medics Money podcast here   Apple – http://tiny.cc/MMapple   Spotify – http://tiny.cc/MMspot   Google – http://tiny.cc/MMandroid

10 financial tips for Consultants (and most other doctors) Back with a bang after a hiatus. The most action packed episode ever? Certainly the most amount of links ever...... Tip 1 - Pay  the  correct amount  of  tax and  be  aware  of the marginal rate of 60% between £100,000 and £125,000 https://www.medicsmoney.co.uk/tax-thresholds-doctors/ https://www.medicsmoney.co.uk/ep-2-how-to-claim-a-tax-rebate-and-reduce-your-tax-bill/ https://www.medicsmoney.co.uk/ep-4-how-to-correct-your-tax-code/ Tip 2 - Keep your paperwork. P60, P45, TRS and payslips https://www.medicsmoney.co.uk/doctors-pay-slip/ https://www.totalrewardstatements.nhs.uk Tip 3 - 3 pension checks that all doctors need to make https://www.totalrewardstatements.nhs.uk https://www.nhsbsa.nhs.uk/nhs-pensions Tip 4 - Spend less than you earn https://www.medicsmoney.co.uk/ebook/ Tip 5 - Protection https://www.medicsmoney.co.uk/nhs-pension-ill-health-death-in-service/ Tommys biggest? financial mistake https://www.medicsmoney.co.uk/income-protection-tom/ Finding a good IFA https://www.medicsmoney.co.uk/independant-financial-advisers-ifa-for-doctors/ Tip 6 - Investing Podcast https://www.medicsmoney.co.uk/ep-16-earn-while-you-sleep-investing-for-doctors/ Webinar https://youtu.be/AkN6-0B3jcM Tip 7 - Lifestyle creep https://www.medicsmoney.co.uk/ebook/ Tip 8 - Wills and inheritance tax Tip 9 - Get a financial plan https://www.medicsmoney.co.uk/ep-6-why-all-doctors-need-a-financial-plan/ Tip 10 - How to find good advice for the right price? What does a good accountant look like? https://www.medicsmoney.co.uk/accountants-for-doctors-how-do-i-find-a-good-medical-accountant/ What does a good financial adviser look like? https://www.medicsmoney.co.uk/independant-financial-advisers-ifa-for-doctors/

There are some important NHS pension changes and deadlines to be aware of. We asked George Crowe, specialist medical accountant to give us a summary. What are the changes to the tapering of the annual allowance that were announced in the 2020 budget? From 16/17 to 19/20 if threshold income exceeded £110,000 and adjusted income exceeded £150,000, allowance tapered. Thresholds increased to £200,000 and £240,000. How do I work out what my pension input amount is for the year? With difficulty. NHS Pensions should provide a pension savings statement with this information on it, but it’s usually not available until closer to the tax return filing deadline and we’ve seen a large number of the statements be incorrect. Other options are the BMA Goldstone pensions modeller which is available to BMA members but is only for consultants and is reliant on the information being input being accurate. Or seeking professional assistance from an accountant or financial advisor. Due to the above it’s worthwhile getting a professional to review your position. Not only to ensure the figures are accurate, but to help with making future decisions to put you in the best financial position possible. So the thresholds mean that most people will have a full £40,000 allowance now, does that mean that annual allowance tax charges are a thing of the past? Unfortunately not, it’s quite common to see pension input amounts in excess of £40,000 for example, If there is growth across all schemes, 1995, 2008 and 2015. For an officer, if pensionable pay exceeds £130k, growth will be around £40k. Anyone on a level 7 or 8, 14+ years of service, could be caught. Even if you are a lower earner doesn’t mean you are safe. For a practitioner, the pensionable pay figure needed to breach the threshold is likely to be slightly lower due to a difference in how the pension benefits are calculated. What are the options available to someone that does have an annual allowance tax charge? The choices are pay the tax charge personally, or elect for the scheme to pay. If paid personally it must be paid by 31 January following the end of the tax year. Be aware that the amount is included in calculation of payments on account, so payment could be 1.5x charge due to paying on account for next years charge too. Alternatively, you can elect for the scheme to pay either all or some of the charge. How does a scheme pays election work and are there any deadlines to make an election? You must enter the charge on your tax return and also make entries to say that the tax charge has been paid by the scheme. A scheme pays election form must be completed and submitted to NHS Pensions. The deadline for a scheme pays election is 31 July the year after the end of the tax year, so tax year ended 5 April 2020, elections must be submitted by 31 July 2021. NHS Pensions pay tax charge quarterly and payment dates don’t align with HMRC tax payment deadline of 31 January. HMRC can, and have, charged late payment interest when the tax charge isn’t paid by NHS Pensions by 31 January. Late payment interest is payable by the individual, not NHS Pensions. NHS Pensions announced that they would pay annual allowance charges for 2019/20, how does that work? Everything works exactly the same for 2019/20 as in any other year, with an additional step, a compensation form has to be completed and submitted. The form has now been released. https://www.england.nhs.uk/publication/annual-allowance-charge-application-form-and-guidance-notes/ Due to possibility of late payment interest charges by HMRC we would recommend submitting scheme pays elections and submitting the compensation claim form when released to avoid delays. What are the implications of not including an annual allowance tax charge on your tax return? Self-assessment tax returns are your responsibility to complete accurately and disclose all relevant information. The excuse of NHS Pensions not providing the figures in time is unfortunately not a reasonable excuse as HMRC will argue that it’s up to you to calculate the position and disclose any charges. If an amount isn’t included and a return is subsequently amended then HMRC can, and will, charge late payment interest. It is also possible for HMRC to charge penalties due to the error, although given the complexities involved with the calculations it’d be surprising if they did this. In addition, if you would want the scheme to pay a tax charge and the scheme pays election deadline has passed then NHS Pensions are under no obligation to accept the election, leaving you with a large tax bill. On the other hand, if you include a figure based on the information that NHS Pensions provide and this figure then turns out to be incorrect, an amended return will need to be submitted. If the tax liability increases then there could be late payment interest charged. In this situation, NHS Pensions and HMRC are usually more lenient regarding scheme pays acceptance and penalty charges respectively. What is the NHS Pension Scheme consultation and what does it mean for members of the NHS Pension? Public service pensions underwent a change to make sure they were sustainable and affordable, which was the introduction of the 2015 scheme. As a result, younger members transitioned to the new scheme, older members did not. In 2018 a court case found that this discriminated against younger members. So members who were affected by transition to the 2015 scheme will be given a choice of which pension scheme they want to be in for the remedy period of 1 April 2015 to 31 March 2022. The choice is between old or new scheme for the period. Also worth noting that all members will transition to the 2015 scheme from 1 April 2022.A consultation sought views on when the decision would have to be made, either immediate choice implemented in 2022 or deferred choice underpin which would be implemented at point of retirement, if DCU then members would revert back to old scheme for the 7 year period initially. The consultation now closed and we are awaiting the outcome. What impact could this have for tax purposes? As this could change the scheme membership over the 7 year period it could impact on the annual allowance position in each of those years. If additional charges arise then these are bound by the 4 year statutory time limit to amend tax returns. If repayments arise these are not time limited so can go back full 7 years. Things that should be considered at the point in making a decision include, value of pension at retirement, whether the scheme gives an automatic lump sum, retirement age associated with the scheme, ill health retirement benefits, survivor benefits. We always recommend seeking financial advice before making any decisions. Contact George and the team at Larking Gowen specialist medical accountants here https://www.medicsmoney.co.uk/accountant/mha-larking-gowen/ Join 24,000 doctors receiving free financial CPD like this by downloading our ebook https://www.medicsmoney.co.uk/ebook/ Subscribe to the Medics Money podcast here   Apple - http://tiny.cc/MMapple   Spotify - http://tiny.cc/MMspot   Google - http://tiny.cc/MMandroid