Business and financial
Incorporation – will it work for you?
I
attended the latest quar- terly meeting of the Association of Specialist Providers to Dentists (ASPD) during which we
spent some time debating the thorny matter of incorporation and dental bodiets corporate (DBC). Some of the common pitfalls covered during the ASPD meeting included:
Taxation While the headline rate of corporation tax (paid by the DBC) is 20 per cent, the remaining post-corporation profits belong to the company and there are potential personal tax consequences if the dentist
requires the money out of the business for personal use.
NHS superannuation scheme My understanding remains that both listed and unlisted dental body corporate contractors are not eligible for the NHS Superannuation Scheme. An individual GDP can register patients and thus become listed, which triggers eligibility for the scheme, but can this income then be treated as the DBC’s income for tax purposes?
Post-tax profits These concern any profits voluntarily retained within a business by the owners.
Such retained profits need to be attributable by individual dentist necessitating ‘behind the scenes’ allocation workings.
Surgery property There are arguments for and against holding the property in the DBC – most of these points of argument centre on tax. It is vital adequate research is carried out here making careful consideration of all vehicles available to own the property.
Income streams Certain NHS income streams are not paid by local health boards to DBCs. While the rules have relaxed in certain
areas over recent times, I strongly advise that direct contact is made with the local Health Board and written clarification obtained. Trading as a DBC is one of
the biggest decisions to be made by dentists and, while research in advance will never provide cast-iron guarantees, it should certainly eliminate most of the potential pitfalls. If you are trading as a DBC and have concerns, all may not be lost, but you need to act quickly to gain assurance that all is well.
The advice in this column is for Scottish dentists and not all of it will apply UK-wide.
ABOUT THE AUTHOR
Roy Hogg is a partner with Camp- bell Dallas chartered accountants, Contact him on 01786 460 030 or at
roy.hogg@campbelldallas.co.uk
Scottish Dental magazine 71
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