We work with GPs and clinicians and wanted to share this latest update about the GP Tax Reforms being introduced in 2024. This reform will affect any GPs not already operating within the standard accounting year, i.e., from 31 March to 5 April.
HMRC announced that they are changing how they calculate tax from profits from 6 April 2024/25. This aligns all businesses to the standard tax year rather than allowing businesses to have their own accounting year-end. This is to introduce a fairer, more transparent set of rules for all companies, including GP Practices.
This means that this financial year 2023/24, which started on 6 April 2023, is now a transition year for all GP Practices who plan to align their tax year to the standard tax year. Below are a few points that you need to take into consideration:
- You may need to pay higher taxes for the 2023/24 tax year. You must pay for your usual 12 months and a few extra months to take you up to the 5 April 2024 deadline.
- HMRC have stated that GPs can retain this current accounting period. However, this could result in you having to submit provisional profit figures annually and a further submission later. These extra steps will generate more work and cost each year, which can be avoided if you move to the standard tax year.
- If you do have an increase in taxable pay during 2023/24, this will increase your pensionable pay. This could result in an annual allowance tax charge. We are still awaiting guidance from HMRC about how this additional tax burden will be alleviated.
If your current accounting period is not aligned with the standard tax year, then we recommend that you speak to an accountant to discuss your options and ensure that all your financial records are up to date.
We have worked with GPs and other clinicians for many years and can support you through this transitional year. You can contact us by calling 01623 490 120 or email