What information do my accountants need?

One of the things that has been highlighted to me over the past year is the deluge of information we have had to deal with via emails. What had seemed like a marvellous invention at the time, has now grown into a monster that is a struggle to keep on top of.

Unfortunately, if you are anything like me, the sorting of emails between those that are important and need to be dealt with and those that are for information only – and sometimes not very useful information at that – is becoming increasingly difficult. I am sure I am not alone in having multiple email addresses as well (one for work, two personal, one for scouting and one for anything RFU related, five in total) so the headache is multiplied.

This has led to me thinking that all of the helpful emails we send out to our GP clients will end up in your inboxes along with several others each day and you may not have the time to read them individually and that means they are not that helpful at all. Whilst I am not saying you should divert all communications from RBP to a junk folder (everything really does contain useful information!) I wanted to try and summarise what we need, why we need it and when it is relevant for.

Deadlines

• Superannuation Certificates – filed by 28^th February
• Tax Returns – filed by 31^st January
• Information sent to accountants – ASAP

The first two are firm deadlines (although the Tax Return is the only one with associated penalties if missed) whereas the time that information needs to be sent to us seems to be incredibly fluid from client to client. The sooner you can send things to us the better, then it means we have more time to ensure that we have everything we need to complete your accounts, tax returns and superannuation certificates. There is a caveat with ASAP though, as sending us your annual accounts on 1^st April when you have a 31^st March year end is rather jumping the gun, as we will need some after-date information to complete these fully. It is also helpful if you can send us everything together and not in separate emails over a series of days as information can get missed this way.

What to Send

• Personal Expenses Claim (if we act for you then we will prepare this, if not we will need a schedule from your personal accountants to incorporate into the partnership tax return). Please complete the latest version of our standard form, if possible but feel free to still send in spreadsheets showing the details.
• Income earned (apart from practice related profits) – this could be employment roles or anything else received ad-hoc such as appraisals, GPwSI income or solicitors’ report fees. We have taken the decision to report these separately from your expenses on your tax return so your tax manager will include them as self-employment income.
• Other tax return information such as bank interest, dividends, rental income, or anything else that is declared separately. (Details of what was on your last tax return will be sent in April to help you know what was declared previously).

Whilst it may be that these items are requested by different members of staff within RBP, they will all end up going to the relevant person, for example, if you were to send tax return information to your practice accounts manager by mistake.

Additional Income – Recurring Issues

This seems to be the area that has caused us most queries over the past couple of years. This is because the treatment for tax and superannuation may be different and the way it has been recorded may even be different from what was agreed when a new post started.

For tax purposes, it is a bit more straight forward, as the ‘assessable’ amount for tax is the gross amount less any employee’s pension deducted at source. So, this would be the figure on a P60, or the amount received by you, if net of employee’s pension.

For superannuation purposes, it is more complex, as we need to declare gross income on your pension certificate.

This means for an employment post we need your last payslip and not just your P60. If it is a CCG post, then it may be that the CCG have switched over to recording this with PCSE via GP Solo. If this is the case, then you should have received a GP solo form in the summer (when you would normally receive your P60). You would have to sign this and return a copy of it to the CCG. We would need this GP Solo form, as this would then be recorded differently on your pension certificate. However, we have found that the majority of CCG posts are pensioned via GP Solo now, so I would encourage you all to ask the question annually of any of your employers, as to whether your income has been declared via GP solo.

It is also useful to know as to whether the post is an officer post (rather than practitioner) as this is recorded separately on your pension record.

For amounts received not via an employment post there is even bigger scope for variation. Using appraisals as an example (but noting this could be for any income, PCN CD roles are the newest issue, as the amounts are normally larger) we can run through the numbers, as can be seen below.

A single appraisal payment is £515, but you could actually receive:

• £589.06 (£515 + 14.38%)
• £515 or
• £440.33 (£515 – 14.5%).

The first is giving you the employer’s contribution so you can declare it on your pension certificate and pay over the ER’s and EE’s contributions meaning you receive £440.33 pre-tax.

The second is just paying you the gross amount, but if you pension this (which you should as it is NHS Income) then you would end up paying the EE’s and ER’s yourself and would only get £384.97 pre-tax (losing £55.36 personally).

The third means you would have received this via GP Solo as the ‘employer’ has deducted employee’s pension and will then pay over both EE’s and ER’s to PCSE with the GP Solo form. You receive £440.33 pre-tax.

As you can see option 1 and 3 leave you with the same net amount pre-tax, but the way it must be recorded is very different. In option 1, you (or at least us as your accountants) are doing all of the work as you have to declare it on your pension certificate and pay over any amounts then, which delays the tax relief claim. In option 3, your ‘employer’ is performing the work and paying over deductions at the time which means you get tax relief sooner. Option 2 is the worst case as not only are you having to do the work yourself, but you are having to pay the employer’s contribution personally too. Although the figures above seem trivial if the income is a CD role that pays £20,000 per annum, then you could be missing out on over £2,000 using option 2!

To summarise:

• If you have other income think about how it is pensioned before you agree to a new role.
• Confirm with whomever is paying you as to what their responsibilities are concerning recording the income with PCSE/NHS Pensions (Officer Role/GP Solo etc.)
• Supply your accountant with as much information as possible – Who is paying this to you, what is it for and whether there is a payslip or GP solo form to back up the income.
• Don’t be afraid to ask us if you are unsure – if you send information to us as soon after 5^th April as possible, we can review this with you. Sending it to us in January leaves little room for discussion before the submission deadlines.
• Expecting something to be pensionable does not mean that it is – the treatment of income may be governed by guidelines in place and it cannot be treated differently.
• Check you are happy with the amount you receive after tax and superannuation contributions before agreeing to a new role – sometimes the headline figure may not be anywhere near what ends up with you at the end, especially if you fall foul of marginal tax rates around the £100-125k thresholds.

Please ask any of us at RBP if you are unsure. If the issue is more complex, then it can be passed on to a partner or other member of the team who can help out. It is definitely better to be proactive and get ahead of these income issues rather than trying to fight a deadline in January or February – or worse still having to deal with a query raised by PCSE after submission!

So, please start gathering your information now to highlight any potential issues early.