Owner-Managed Businesses

Doctors and dentists ― self-employed expenses

Produced by Tolley
  • 23 Jun 2022 10:31

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Doctors and dentists ― self-employed expenses
  • Practice expenses
  • Expense claims
  • Personal expenses
  • Property expenses ― use of home
  • Travelling costs
  • Capital allowances
  • Employee costs

Doctors and dentists ― self-employed expenses

Practice expenses

Most GPs have adopted the practice of making annual claims for income tax purposes in respect of amounts paid out privately in connection with their practice. Typical expenditure of this nature includes:

  1. medical subscriptions

  2. motor car and travelling expenses

  3. personal telephone charges, and

  4. salaries and benefits paid to spouses

Where a doctor or dentist is a sole practitioner, such disbursements are normally charged in the practice account. They are expenses incurred wholly and exclusively in connection with their profession and are allowable. They are treated as any other expense of the business.

In the case of a medical or dental partnership, it is necessary to establish which expenditure should be paid out of partnership funds and which are to be borne personally by the practitioner. In ideal circumstances, this will be set out in the partnership deed. Often the deed is silent and the position should be confirmed in writing.

In these circumstances, the partnership accounts do not reflect the full costs of the partners. It is important that the practitioner receives the relief due on such expenditure. This is usually achieved by the submission of a practice expenses claim which is deducted from their share of the partnership profits.

Expense claims

Expense claims should be drawn up to the same accounting year end as the partnership accounts and it should include all items paid personally by the partner concerned.

The claims must be taken into account when calculating the partner’s taxable profits on the partnership return. A separate

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Popular Articles

Quick succession relief

What is quick succession relief?Quick succession relief (QSR) reduces the tax payable when the same property has been subject to more than one charge to IHT. It applies where there have been two chargeable transfers on which tax is payable within a period of five years.Although commonly called QSR,

23 Mar 2022 11:02 | Produced by Tolley Read more Read more

Class 2 national insurance contributions

Class 2 and Class 4 NIC are payable by self-employed earners and partners in a partnership. This guidance note considers Class 2 contributions. For Class 4 contributions, see the Class 4 national insurance contributions guidance note.Class 2 NIC arise where a self-employed individual has income

23 Jun 2022 10:31 | Produced by Tolley Read more Read more

Bare trusts ― income tax and CGT

This guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax liability falls on the trustees

23 Mar 2022 10:40 | Produced by Tolley Read more Read more