Managing your finances as an NHS doctor requires attention to detail and regular reviews, especially with tax returns and pension considerations. Here’s a straightforward guide to help you stay on top of your financial responsibilities.
If you’re doing locum work or have any self-employed income, you must complete a self-assessment tax return by January 31st each year. Get organized early by keeping all your paperwork in one place – this includes invoices, expense receipts, and bank statements. Having a separate business bank account makes tracking your professional income and expenses much easier.
For tax returns, you’ll need your Unique Taxpayer Reference (UTR) and Government Gateway login details. If you’re new to self-assessment, request these early as they come by post and can take up to seven days to arrive.
Make sure you’re claiming all legitimate expenses, which can include:
- Medical indemnity costs
- Professional membership fees (GMC, BMA)
- Travel expenses for work
- Equipment and office costs
- A portion of household bills if you work from home
Remember to check your tax code regularly. A simple way to understand your code: multiply the number by 10 to see how much you can earn before paying tax. For example, if your personal allowance is £12,570, your tax code should be 1257L. Emergency tax codes (like BR, X, WK1) need immediate attention.
For NHS pension matters, review your Total Reward Statement annually. With recent changes including the McCloud remedy, it’s crucial to check that your pension records are accurate. Request a detailed service history from the NHS Pensions Agency to spot and correct any mistakes early, rather than discovering problems at retirement.
If you’ve changed roles – for example, becoming a consultant or GP partner – review your sick pay entitlements and income protection needs. NHS sick pay varies by position and length of service, so ensure you have adequate coverage for your circumstances.
Consider working with a medical accountant, especially if you have complex arrangements or multiple income sources. While this costs money, accountant fees are tax-deductible, and they can often save you more than their fee by ensuring you claim everything you’re entitled to and comply with tax rules.
Keep track of key deadlines:
- Tax return submission and payment: January 31st
- Pension scheme pays elections: Usually July 31st (though extended for 2022/23 due to McCloud remedy)
Life changes like marriage, children, or changing work patterns should trigger a financial review. These events might affect your tax position, insurance needs, or pension planning.
Finally, start preparing for next year now. Set up a simple system to track your income and expenses throughout the year. Consider using digital tools designed for medical professionals to manage your finances. This ongoing organization will make your next tax return much easier and ensure you’re making the most of your earnings.
Remember, while managing finances can seem daunting, breaking it down into regular small tasks makes it much more manageable. If you’re ever unsure about specific financial matters, seek professional advice from someone who understands the unique aspects of medical finances.