HOW MUCH WILL A DENTIST PAY AN ACCOUNTANT?

How much will a dentist pay their accountant?

If you’re an associate dentist, your accounts and tax return will fall in to one of two categories – you’re either self-employed or you work through your own limited company.

Your accounts and tax affairs will be simpler and therefore cheaper if you’re self-employed. A limited company provides more opportunity for tax savings, but its more complicated. This means you’ll pay your accountant more for their services.

Prices are usually cheaper if you use an online service where most of your contact with the accountant is online and you don’t have a dedicated accountant to speak to.

Tax Return Small Biz Accounts
Dentist Tax Advice

When do I pay?

It’s now standard practice to pay monthly for your accountancy and tax services. You’ll normally start to pay monthly at the beginning of your accounting year. If you join an accountant part way through the year, then you’ll have a lump sum to pay to cover the part of the year before you engaged your accountant.

There may be one off costs at times, for services such as registering as self-employed, forecasting your tax liabilities, setting up a company, share changes, etc.

VAT

All the prices below include VAT – unfortunately dentists can’t reclaim any VAT on their expenses. There are some smaller accountants that are not VAT registered, and their prices would be lower than the market range below. When you get a quote from an accountant, always check to see if it includes the VAT, as you don’t want to be hit with an unexpected extra 20% on your bill.

— Pricing Plans —

LIMITED COMPANY

This is a good option for some dentists as it can help to save more tax than if you’re self employed.

Total limited company cost per year:

Market price: £950 – £2,750

Small Biz price: £1,195 – £2,200

There are a number of separate services you’ll need from your accountant to run a limited company. Some accountants will give you a single package price for all of these, or you may get a breakdown of the price for each service.

Software

Traditionally, you would send your bank statements and documents by post to your accountant each year.

However, there are now accounting software packages that can access your business bank account directly. Both you and your accountant have access to the software and your accountant will use it to prepare your annual accounts.

Xero and Quickbooks are examples of this software.

Price per year: £72 for a basic subscription

 

Annual accounts and company tax return

Your company must prepare a set of accounts each year to submit to Companies House and HMRC. They need to comply with current accounting standards which dictate how your income and expenses are determined, the layout of accounts and any notes or additional information to be included.

The higher your income, the more complicated it becomes to prepare your accounts. An increased number of transactions means more data needs to be checked and will mean more queries from your accountant.

If you use a software package, all the bank transactions need to be matched to a type of cost (e.g. training, tools, etc.). If your accountant has to do this, then they will charge more for the extra work, but the costs will reduce if you enter all this information yourself.

You also need to send a company tax return to HMRC. Your accountant will use the information from your accounts and then make adjustments to calculate the correct tax. If you have a director’s loan from your company, then an extra form needs to be prepared and included with the tax return.

At SmallBiz Accounts, we also include in this service specific advice on how to retain and/or take your money out of your company to save as much tax as possible, taking in to account your personal circumstances and careful use of tax-free allowances and reliefs.

Market price per year: £600 – £1,500

SmallBiz price per year: £950 – £1,300

 

Payroll

As all your income is going into your company, you then need to get it from the company to you personally. The first step is to pay a salary to yourself (and possibly your spouse or relative – see article here). Your accountant will set up the most tax efficient amount. They will submit all the payroll information to HMRC, send payslips and other documents to employees and deal with any queries from HMRC.

Price range per year: £70 – £180 per person getting a salary from your company

SmallBiz price per year: £72 – £144 per person getting a salary from your company

 

Dividends

This is the second most common way to take money out of your company. Dividends have to be officially agreed by the directors and vouchers issued to the shareholders. An accountant will normally advise you on the most suitable amount of dividends for that tax year, and how much tax you’ll pay. They will then prepare the documents for you to sign and update your accounts.

Market price range: May be included in the cost of your annual accounts, otherwise up to £70 per dividend

SmallBiz price per dividend: £43

 

Personal tax return

When you receive dividends from your company, no tax is deducted. Therefore, you need to complete a self-assessment tax return to calculate how much tax you owe.

An accountant will gather information on all your income for the year (salary, dividends, interest, rental income, etc), plus any capital gains (where you’ve sold an asset such as a property or shares). They’ll complete your tax return and submit it to HMRC. If there are any queries from or errors by HMRC, your accountant will deal with these and make sure you pay the right amount of tax.

Market price per year: £120 – £500

SmallBiz price per year: £180 – £400

 

Registered office

The registered office of the business is the official office of your company and is available for the public to see on Companies House website. If you don’t want your home address to be published, then you can use a registered office service, with government and legal mail forwarded to your home address.

Market price per year: £35 – £85

SmallBiz price per year: £72

 

Confirmation statement

This is an annual form to be submitted to Companies House giving details of the company address, directors, shareholders and activities of the business. You accountant will check with you that the details they hold are correct, and then submit to Companies with the filing fee (currently £13).

Market price per year: £35 – £70

SmallBiz price per year: £58

 

Fee protection for tax investigations

HMRC may choose to investigate any taxpayer. To safeguard you against the Taxman, fee protection insures you against any accountant’s fees that may arise if HMRC enquires into your tax affairs. It should cover all your business and personal tax affairs.

Ordinarily, if your accountant claims for their costs under this policy, the VAT on these fees is payable by you because the insurance policy does not cover the VAT. However, at SmallBiz Accounts, we absorb the VAT cost and don’t charge it to our clients.

Market price per year: £99 – £300

SmallBiz price per year: £115

— Pricing Plans —

SELF EMPLOYED

If you want to preserve your NHS pension rights, then self-employment is better suited to you.

Total self-employed cost per year:

Market price: £370 – £1,200

SmallBiz price: £600 – £1,100

 

Software

Traditionally, you would send your bank statements and documents by post to your accountant each year.

However, there are now accounting software packages that can access your business bank account directly. Both you and your accountant have access to the software and your accountant will use it to prepare your annual accounts.

Xero and Quickbooks are examples of this software.

Price per year: £72 for a basic subscription.

 

Annual Accounts

Your accountant will prepare an Income and Expenditure account, showing the profit you have made after all your expenses have been paid. This is then used to prepare your personal tax return.

The higher your income, the more complicated it becomes to prepare your accounts. An increased number of transactions means more data needs to be checked and will mean more queries from your accountant.

Market price per year: £250 – £650

SmallBiz price per year: £360 – £620

 

Personal tax return

Your accountant will gather information on all your income for the year (self-employment, dividends, rental income, etc), plus any capital gains (where you’ve sold an asset such as a property or shares). They’ll complete your tax return and submit it to HMRC. If there are any queries from or errors by HMRC, your accountant will deal with these and make sure you pay the right amount of tax.

Market price per year: £120 – £500

SmallBiz price per year: £180 – £400