Aesthetic
Providing specialist Accountancy & Tax advice to Aesthetic Clinicians across the UK.
Aesthetics Accountancy.
Welcome to AF Tax Solutions, the home of expert tax advice for the aesthetic industry. Saving clinics and practitioners across the country money and time.
We understand the time constraints of running a busy clinic, but with most aesthetic practitioners in the UK today needlessly paying too much tax, getting professional help is sensible. Our seamless accountancy services ensure you don’t pay a penny more VAT than is required – leaving you to do what you do best – treating your patients. We can assist with:
- Advise on which Aesthetic services are VAT-exempt
- VAT registration and filing VAT Returns
- HMRC enquiries
- Preparing financial accounts and Tax Returns for sole traders and limited companies
- Providing Tax Advisory services for Aesthetics Professionals
AF Tax’s Andrew Fenton understands the fine detail of taxation for the aesthetic industry. Having been a former Inspector of Taxes at HMRC, he has been running AF Tax for 7 years – with medical and aesthetic taxation as his specialism. As an industry leader, Andrew lectures at hospitals and clinics, demystifying the tax system to help save aesthetic professionals money and time.
AF Tax Solutions offer specialist tax and accountancy advice to Aesthetic Practitioners across the UK. If you have any questions, get in touch, we’d be delighted to advise you.
FAQ’s.
The Annual Investment Allowance (“AIA”) allows most business to claim 100% capital allowances on qualifying expenditure. This means if your business buys certain types of equipment that qualify for the AIA, you can deduct 100% of the cost of that asset from your business’s profit before you work out how much tax is due on that profit.
HMRC rules say that: “You can claim capital allowances when you buy assets that you keep to use in your business,” such as:
- equipment
- machinery
For small businesses, this means you can claim on specific items of expenditure such as laptops, computer equipment and servers, office furniture etc.
If your business is VAT Registered, you can claim the AIA on the total cost of the asset less any VAT you can reclaim on that asset. If your business isn’t VAT registered, you claim the AIA on the total cost of the asset, including VAT.
From 1st April 2021, a new ‘super-deduction’ Corporation Tax relief was announced for limited companies. The super-deduction is not available to sole traders, who can continue to use the Annual Investment Allowance (see above).
The super-deduction offers 130 per cent first-year relief for qualifying expenditure on plant and machinery from 1st April 2021 until 31st March 2023.
By way of example, a small business purchasing a qualifying asset (such as a laptop) for £1,000 after 1st April 2021 will now receive £247 in Corporation Tax relief under the new ‘super-deduction’ tax relief. Under the AIA, the equivalent amount of corporation tax relief was £190.
VAT Registration is only required if your turnover exceeds the VAT threshold– currently £85K but this threshold only incudes your “Taxable” income., which may be less than your total turnover. If you make supplies which are exempt from VAT then these are not included in the calculation.
The VAT exemption test is determined by two tests (both of which must be met)
- If you are a medically qualified person on a medical register, acting within your training, experience and knowledge, and
- 2) you provide medical care, then your supplies are exempt from VAT. Medical care is defined in different ways but, for VAT, is generally taken to be treatment where the purpose is mainly for the protection, maintenance and restoration of health. The purpose is the important test for VAT; it is not enough to be a medical treatment – it must be a medical treatment given for medical purposes.
HMRC guidance at Notice 701/57, Para 4.4 Cosmetic Services states “Each case will need to be considered on its individual merits. However, we will generally accept that cosmetic services are exempt where they’re undertaken as an element of a health care treatment programme. Where services are undertaken purely for cosmetic reasons, they will be standard rated.”
The rules for tax relief on training costs depend on whether the individual is employed or self-employed. An employed individual can have work-related training paid for by their employer or be reimbursed for training costs by their employer without any tax consequences.
However, if an employee pays for their own training costs which are not subsequently reimbursed by their employer, there are only very limited circumstances in which that individual can obtain tax relief.
For the self-employed, relief is generally allowed where the costs are incurred to update the individual’s existing skills but denied if the individual invests in training to develop new skills.
It is very important you keep your personal records separate from those for your business. This is so that if HM Revenue & Customs (HMRC) ask to see your business records, they are completely separate from details of your personal income and expenditure.
Although the accounting records a business needs to keep will vary depending on the size and nature of the business, a general guide would be that a business should aim to keep the following records:
- Record all sales and other business income and retain the records, for example, invoices, bank statements
- Record all purchases and other business expenses as they arise and ensure, unless the amounts are very small that you keep invoices and receipts
- Keep a record of all purchases and sales of assets, such as capital equipment, which are used in your business
- Record all amounts taken out of the business bank account, from cash or stock, for your own personal use
- Record all amounts paid into the business from your own personal funds, for example, paying for stock with your personal credit card
- If you are claiming mileage allowance for business trips you must record details of the journey, such as date, number of miles travelled, destination and purpose of the business trip
If the expenses were incurred within seven years of you starting to trade, and the expenses would have been tax-deductible if you had incurred them while you were trading, then you can treat them as if they were incurred on your first day of trading and so claim them in addition to the other business expenses relating to the first period of trading.
As a sole trader you will pay Income Tax and National Insurance (“NIC”) on your profits, and as a sole trader you keep all of the after-tax profits the business makes.
A limited company is a separate legal entity that you can form to run your business, so the profits belong the company. So as the director and shareholder of the business you want to take money from your business so instead you might pay yourself a salary and dividends.
Choosing the right structure for your business is an important decision and must be right for you and there are a few points to consider such as – do you have an income from another job, are my profits likely to rise, would I benefit from limited liability?
For further information or for a free initial consultation to discuss your tax affairs please contact Andrew Fenton (Director at AF Tax Solutions Ltd) on [email protected] or call 07775 503475 or 01323 845083.
Andrew is a Chartered Tax Adviser (and a former Inspector of Taxes with HMRC) and has many years of experience in dealing with the tax affairs of medical professionals.
Testimonials.
What our clients have to say about us…
Andrew and his team have managed both our personal and business accounts for a number of years. The service has been exceptional and time sparing. All aspects of tax have been managed quickly and efficiently, and everything explained in plain English. Really pleased with the service that ultimately has saved me a vast amount of time as well as being tax efficient.
It gives me great pleasure to write the reference for Andrew, who has been looking after my tax affairs for the last five years. Since Andrew personally took over accountancy for myself and my partner he has also helped set up our company. He is extremely professional and thorough in all matters financial. He has a quietly persuasive manner, which ensures that even the most reluctant of his customers will return the relevant documents back to him in time! Indeed, I can safely say that since Andrew took over our tax affairs we’ve not had a one single late-return penalty from HMRC.His knowledge of tax affairs, accountancy and general finance is vast and he has helped me in other areas of financial investment and acquisition for the company, such as a company car. He is an extremely present individual to communicate with and I am pleased to say that a number of colleagues have also taken him on as their accountant.
Andrew and I have now worked together for four years and I must say my practice has become highly efficient as a result of Andrew. His attention to detail is second to none. His knowledge of tax law is exemplary, and his client care has been fantastic. I have no hesitation in recommending Andrew to take care of your accounts.