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Decoding HMRC- Income Tax Returns for Doctors

Hi, my name is Pranshu Khurana. I am an IMG from India, and I am working as a clinical fellow in one of the biggest children’s hospital in London. In today's blog, I am going to tell you about how easily you can fill in your self-assessment tax returns via HMRC and save your hard-earned money.


I will discuss in this blog the following:


  • Income tax and tax codes

  • Who should fill out a tax return?

  • Things you can claim tax returns on

  • Self-assessment tax returns.

  • Conclusion

        

Income tax and codes


Income tax is nothing but a fee that the government takes for public works, so in simple terms, if you earn a certain amount above the threshold then you need to pay a part of your earnings towards the betterment of public services that will directly help you in the long run.


There is a set amount of personal allowance that we all get that is tax-free over that amount anything you earn gets taxed according to your slab. The tax year starts on the 6th of April and finishes on the 5th of April the preceding year. 


Tax rates and bands:

 

Band


Taxable income

Tax rate

 

Personal Allowance

Up to £12,570

0%


Basic rate

£12,571 to £50,270

20%

 

Higher rate

£50,271 to £125,140

40%

 

Additional rate

over £125,140

45%


In addition to the above, if you have any other source of income for example rental income, savings account interest, or dividends from stocks you would have to pay tax on these as well. In short, it’s better to earn less as less money earned means less tax paid and live a relaxed life.


Who should fill out a tax return?


The government is smart so they often cut out the tax before you get paid but sometimes as humans can err so we should always file our tax returns at the end of a tax year so that if by chance you have paid more in taxes you can get some refund. It’s quite easy to file your tax return by yourself using the HMRC self-assessment tax return or you can take the help of some people who are trained to do this for example, Chartered accountants.


You must inform HMRC by 5th October to complete a tax return. If your only income is your salary from the hospital you don’t need to file a tax return as that is already taxed but you need to inform HMRC and you will get a letter from them confirming the same. You can also claim up to the past 4 years as long as you were working in the UK.

NOTE: You may have to pay interest and a penalty if you do not file and pay on time.

Things you can claim tax benefits on:


As doctors you can claim tax relief on the following things:


  1. Stethoscope and any other professional equipment we have purchased which is necessary for our jobs.

  2. Professional fees which include BMA membership, GMC registration, and indemnity insurance.

  3. Fees from Royal College membership and portfolio: Kaizen, MRCPCH, RCP, etc.

  4. Fees for exams and courses that are mandatory for you to do that will help you progress in your career.

  5. You can also claim money for fuel expenses if you use your car to commute to do home visits and take exams, and also on train tickets if you use them for work matters.

  6. Books or online subscriptions that you pay for to study for your exams.

  7. NHS pension and other courses that help you to progress in your career excluding the money that you already got back from the hospital as a study budget.

 

You can only claim for the things which you paid for since you started earning in the UK, you can’t claim your PALB exam fees as most doctors have to give them before they move to work in the UK. 


The main thing is what will you get after you do all that, it’s just 10-20% of the actual amount you spent. I know that is just a small figure but if you put all this together it usually makes an impact and money saved is money earned. 

 

Self-assessment Tax Returns:


This is an easy system to collect tax made by HM Revenue and Customs (HMRC). There are 2 ways in which you can do it either fill in all the details asked for online or send a SA100 form. Please keep a record of all your receipts, and bank statements so you can fill in your tax return correctly. They will calculate what you owe based on what you have reported. After you fill in the assessment HMRC will generate a bill if you need to pay any amount or a refund that you are supposed to get. The deadline to pay the bill is usually mentioned in the bill or it is around 31st January.


Conclusion:


HMRC is the tax authority of the UK government which is responsible for collecting and refunding taxes for the working professionals. The Self-assessment online tool is a quick and easy way to fill in your tax returns and get a refund sooner directly into your bank account. Apart from the above blog, you can directly visit the HMRC website to look for any other information required or you can talk to HR in the hospital and get in contact with your hospital's financial advisor. There are ways in which you can save more tax that I will discuss in further blogs in this financial series of blogs.


Need More Help?


If you need more tips and strategies then do follow Trewlink which is a wonderful platform for IMGs that helps and guides you in all possible ways. If you have any questions about Income Tax returns, I would be happy to answer them at trewlink.com. You can register using this link https://trewlink.com/?referrer=pra923842. Find me as an Ambassador/Expert and Follow my profile Pranshu Khurana to receive regular support and advice.


Take Control of Your Career:


Learn more about how MPS membership can protect your career. Visit MPS’ dedicated IMG Hub for detailed information and to start your membership application process.



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