Tax Expert Reveals the Hidden Loophole That Can Save You THOUSANDS

I think you mentioned something about avoiding HMRC trouble. If I tell you something, nobody wants to get into hot water with hmrc. Nobody needs that extra headache in their life.

HMRC is worth looking at how they can generate as much tax as we can.

It was when I did my self assessment, I became obvious that I had all this money I'd given to charity, church, different organizations and I was not claiming it until I did a self assessment amounted to several thousands of pounds. And so I. I agree with you. Sort of like learning about the system and most times because of the complexity, having the right professional to help you is important. But I know that at Some point that 20 changes to a very interesting figure. At what point is that?

Once your income gets to 100,000.

Yeah.

In case the total pension is no more than 50,000.

Yes. You take tax on you difference between what the church or the charity could have claimed, the 25% and what band I'm being taxed on. For instance, if I'm being taxed on 40%, I could then claim the difference. Is that what you're saying? I know you said paye. For those who don't understand what's paye? What does it practically mean? I like can you. Just the same way you've simply described a lot of things. What does it mean really? Foreign. Welcome back to Moneywise doctor podcast and I'm delighted to have you again. As you know, here we discuss how doctors and healthcare professionals can make smarter financial decisions. Sometimes it's about investment, sometimes about taxes, and other times we're talking about changes in the government laws and how it affects you, as well as how to make smart, responsible financial decisions. Today I've got a special guest in the house. I've actually gone to bring in a product proper professional, someone who does numbers and accounting for a living. Sort of been working behind the scenes and sometimes when I'm, I'm coming out to create content around accounting or things like about taxes, I check things with them and they also help me with my taxes. So today let's make welcome the gentleman, Latif, an accountant from ASCSL Accountants in Excess. Latif, you're very much welcome.

Thank you so much, Dr. Egwam.

Lovely. Yeah. Thank you for taking time out of your busy day to join us. I know you're doing taxes and numbers and all that. Yeah. Can you tell us just a little bit about yourself, where you work, what you do and how long you've been doing it for?

Yeah, my name is going to work as an accountant With a accountant limited. So I've been with a accountant for the last four years.

Wow. You know, a lot can happen in four years. I suppose if you look at myself, looking at the UK system, what has happened in the four years when it comes to things like personal tax allowance has remained the same but obviously things like your pension allowance has gone from 40,000 to 60,000. You get all that happening like the British ISA that has been announced but yet to be implemented, the non dumb tax. I'm sure there's a thousand other things that you guys have to keep up with. But today we are going to talk about how taxes, how doctors could be smarter with their taxes, dangers and things to watch out for and then basically how to make smarter tax decisions and put more money in your pocket legally. How does that sound?

That's good. The thing is about Wacosuit Tax UK just getting to know the system properly and getting to understand what to do and what not to do, basically. So problem as well, that is also important because as long as we're trying to save the money, we have to ensure that whatever we are doing is legal.

Yes.

Based of an HMRC check, we can present whatever we've done to them and this happen that we've done is the right thing.

That's, that's, that's really important. I, I think you mentioned something about avoiding HMRC trouble. If I tell you something, nobody wants to get into hot water with hmrc. Nobody needs that extra headache in their life. But you're saying that you can actually be able to be tax efficient, you can claim back your money, you can actually avoid overpaying tax while still avoiding HMRC trouble, Is that correct?

Yes, that's correct. There are legal ways with which you can be more tax efficient. Okay, but I say legal ways. I mean that methods that even HMRC are aware of and they are okay with it. So as long as you have your proof, you have the documents.

Good. I mean it's legal with most of my audience are doctors, nurses, healthcare professionals and a few other finance professionals who join us anyway. And I'm sure they all want to stay on the right side of the law. So we want to stay with the legal laws. But just a quick question. You said there are legal ways and HMRC is aware of it. Will HMRC make me aware of it? Would they tell you that these are areas you can claim taxes? Do you think they would inform us to let us know that, look, you're not claiming enough tax relief or you're overpaying taxes.

HMR was looking at how they can generate as much tax as we can.

Fair enough.

Normally. HM also will not tell you, say you have this money to them or you're supposed to do. However, at the end of the tax day, you know, if your house believe they've overtaxed you, they tell you, oh, we, we taxed you by, we've over taxed you by this amount.

Yes.

Fund you. But they won't come to tell you, oh, if you donated money to charity, come, come and claim the, come and claim the tax relief on that contribution. Hm will not tell you that. So that's the reason why you need an. A professional.

Yeah.

Ready on that journey to let you know. See, this is how you go about this. You've done this one. Fine. You can use it to reduce your tax liability and all that. Because like that you need a professional, especially in the uk, actually an accounting professional that can guide you. Yeah, your finances, of course.

I mean when. Why ask that question that a lot of doctors and healthcare professional, an average individual, they're not really aware that they could be legally entitled to some tax relief or things like that. I mean in my own experience, I think it was when I did my self assessment, I became obvious that I had all this money I'd given to charity, church, different organizations and I was not claiming it until I did a self assessment amounted to several thousands of pounds. And so I, I agree with you. Sort of like learning about the system and most times because of the complexity, having the right professional to help you is important. But we'll come to that. First of all, let's delve into tax and tax mistakes. But we'll start with the basic stuff because some people listening also are sort of like doctors. We deal with our daily activities and all that. Tax is not what we do with daily. When we say HMROC, we're talking about HMRs. Let's assume that we don't know what HMRC. Who are HMRC? Just in simple terms, you don't need to know what the acronym. But what do they do? Who are they? Who are big bosses? Hmrc.

So basically HMRC is just a body, a government body that is responsible for the tax system. The tax system in the uk.

Yes.

So they are basically responsible for collecting the tax on the UK resident from the company as well. So that's just in simple terms.

I think I like it like that. Just keep it simple. Majesty's Revenue Commission. But what, what they do like that they tax and they decide how much taxes you pay. If you overpaid you pay the taxes to them and they are very powerful. They can get into any accounts they want and they can actually get any information they want. So we don't want to mess with them, but at the same time we don't want to overpay taxes. And that's why we've got you here, Latif. All right, so now going into taxes and, and details, when it comes to uk, I want to start with what are sort of like the tax bands. What do I, how much do I have to earn before I start paying tax? And at different levels, how much tax do I have to pay? I'll give you an example as a doctor, let's say junior doctor, who is earning. I'll give a rough example. Let's say 40,000, maybe a bit more, but let's just start with 40,000. How do they start paying tax? Where did they start paying tax?

Okay, thanks for that. I basically the way you can personal tax system works is that you have a personal allowance.

Okay.

The basic thing everybody knows, oh, I have a personal allowance, but what's that? Personal allowance. So the personal allowance is just the amount of money that when you earn up to that amount.

Yes.

You do not have to pay tax. That, that's just what the personal allowance is. Currently the personal allowance is set at £12,570.

Okay.

What it means is in a year. So I'll just digest a bit. When I say a year, I'm talking about tax here.

Okay.

Yeah. The tax year starts from 6th of April.

Yes.

For the current year to the 5th of April of the following year.

Okay.

In a tax year, as an individual working in the UK, a UK, you have a personal allowance of 2,570. So meaning within the tax year, if you earn just £12,570. Yes. You do not have to pay tax on that. 12,570.

Yes.

However, once your income costs that 12,570, even if it is just by £1.

Yes.

Then HMRC start changing you. You have to pay your tax.

You have to pay tax. Thank you. That's a very, very clear explanation. But, but you highlighted a very important point there that I want to bring out. Uk and most times you're an expert in your field, so it's easy for experts to assume that other people know these things. Most people don't know that the tax is not January to December. Some people think the tax is, is January to December, but it's quite important to know it's from April 6th. That's the tax year, the beginning of the tax year and April 5 is the end of the tax year. So you're saying that if for, for instance, I, I did my masters, I was a student at some point, if for the whole year all My income was 12,570 for any reason, whether it's because as a company director that was my salary, or because I worked only minimum wage jobs and I was working part time, if I earn 12,570 or less than that, then I'm not liable to tax, Is that correct?

Yes, that's correct. As long as the total personal income for the year is Nothing more than 12,570.

Yes, that's useful to know. Now let's go to the next level. Let's say, okay, this junior doctor is any more than 12, 570, let's say them, it's just starting her, she's just starting her training and she's earning £40,000. Junior doctor and a lot of times say junior doctor, but most junior doctors actually like been doctors for many years, unless it's earning £40,000. So for the first £12,570, it's totally tax free, but they're going to have to pay tax on the rest of the money, Is that correct?

Yes, that's correct. So Basically the first 12,570 you earn in your tax year is tax free. That is you pay 0% tax on that. Then from the 12,571 up until 50,270. So that's about 37, 000.

Yes.

You pay tax at 20%. Right.

So that 20 is the basic. Okay, that's the basic, that makes sense. So you start with 0% for 12, 570 for all your income. Because I, I'm reminded when you say oh, it means whether I had rental property income, whether you were paid something, whether you had a side hustle and all that stuff, you got dividend, it was less than 12,5 tax. Then everything from above 12,5,70, you pay 20%. But I know that at some point that 20 changes to a very interesting figure. At what point is that?

Yeah, that's correct. So once, once your income in a year.

Yes.

Is above 50, 270 pounds. Oh, then anything above that you start paying the tax at 40%. I found that at 40% and until the income gets to about 1,25. 140.

Yes.

On up to 125,140, then you pay tax at 40%. And once you cross that threshold of 125, 140. Then your tax increases to 45. So that is the higher rate, that's the additional rate, you know, and.

Okay, yeah, I'm just going to interrupt you a little bit. The way you fling numbers. I know accountants like numbers, but let's slowly rule because you want to understand it basically. So I start with 0%. If I'm ending 12, 5, 7 0. Fair enough. 0%. 12, 570 is not a lot of money. Then at 50,000, that's the magic number. 52, 17, I swing into the. Sorry, between 12,570 to 50,000. I'm just going to use 50,000. It's still 20% tax, but only after you remove the 12, 5, 7. But then once I cross that magic number 50,000 then suddenly doubles, it goes from 20, 20% to 40%. So does that mean that if, if I get a promotion or if I start earning a bit more, or let's say I get dividends and I just cross 5, 50, 270, whatever I earn above that level is going to be taxed at 40%? Is that, is that what you're saying?

Yeah, Anything you earn above 50,270 will be taxed at 40. But just, just to add this, it does not mean if, if you are earning say 50, 000, let's say you're earning 51, 000. It does not mean the old 51, 000 will be taxed at 40%.

Exactly.

It is, it is at a level. So what happens is from the 50, 000, 51 000. As an example, here you take out the 12,570. You're not combat.

Yes.

Between 12,571 to 50,270, which is about 37,750.

Roughly 20%.

Roughly the amount. Then you pay 20% on that.

Yes.

Then the difference between the 50,000 to 70 and the 51,000 pounds, which is about 730 pounds, that is. It is on that that you pay the tax of 40%.

Thank you for clarifying that. You know, there's a lot of misconception. I've seen someone who wrote a post on very popular Nigerian blog to say, oh, I was promoted and then my income dropped. And then this, they gave some, you know, people didn't understand this thing. They thought that the whole 40% is taxed, but it's actually the extra on top of it. Okay, now we've moved from no tax to basic rate tax, which is 20%. I will move to higher rate tax, which is 40%. Now you were going somewhere and I had to slow you down a little bit. I know like this is a trap now where some consultants GPs and some really senior, you know, NHS professionals have found themselves. So you're saying that okay, this 40 is not the end of it. If you get to 1 125, 140 or ease of calculation. I'll say 1 for ease of, you know, saying, I'll say 125000 above that rate. You then launch into what they call the additional tax rate layer, which is how much? What's percentage? 45%. It seems like the biggest jump was just from the middle, like going from basic 20 to the higher one, which is 40. Because 40 and 45%. I mean 5% is big, but the big jump was from basic to higher. Would you agree?

I will not agree. How will I put it down? Paper.

Okay.

But there's another thing you need to consider.

Okay.

Because once your income gets to 100 000.

Yes.

Personal allowance. That will be say, you know, you're into a 570. It should not be taxed. Once your income gets to 100 000.

Yeah.

You start losing your personal allowance.

Aha. So this is a big one for a lot of doctors, healthcare professional, Everybody in above 100 000. So is that the 60 tax prop. The horrible 60% tax trap.

There is no 50 tax rate according to HMRC. When you do the math, if you almost get the amount.

I was going to ask you, are you qualified as both of accountant as a lawyer as well.

But I agree with you in UK tax you also have to know the legal part of it because.

Yeah, but I. Yeah, carry on.

This 50% tax is just a concept that people have come to develop which if you look at it, it is. It is actually correct.

Okay.

Because once you. Once there's something, there's something called the effective tax rate.

Yes.

You take your Patrick on the. Let's say you're earning 200000 for example.

Yes.

Like when you look at the effective tax rate, that is how much exactly. As in the doctor that's taxed from this income.

Yeah.

It should be close to that 60. So that's. That's why people just go out that quote and say 60 tax. However, so HMRC, HMRC is not charging 60 has charge you is 0% high 7020 for the basic rate, 40% and then for 5%. That is all the HMRC news that.

That is fair enough. I don't expect to go to hmrc.gov that you can see 60 tax rate. But you summarize it with effective tax rate compared to Mike, my neighbor, compared to my colleague in UK who is getting the tax allowance, the 12,570-my-effective tax rate suddenly goes up and it works out at 60 for those between 100,000 and 125140.

Because the, the way the personal allowance goes is once your income gets to 100,000.

Yes.

So for every two pound you earn.

Yes.

By one. Right. By one pound.

Yes.

I mean if you earn one two pound.

Yes.

Use one pound of your 12,570.

Just to straight, just to stress it, sorry to cut in. So Once you cross 100,000 or whatever the exact figure is for every extra £2 you earn above 100,000 you lose £1 of that 12,570 personal tax allowance that was tax free. So you now have to pay tax on that as well, probably at the higher rates as well.

So what that means is the one pound that you've lost from the personal allowance added back to your taxable income. So the, in this case the, the. For every two pound you lose one pound and by the time you get to about 125000 then you don't have any personal allowance left. So what that means is all the money you earn for that year, each and every penny of it will be taxed because you've lost your personal allowance. You have to pay opportunity.

I mean that sounds. I've seen people and believe it or not, whether we could discuss about whether they're good with budgeting and planning or whatever, but I've seen people earning 100000 and they're not, they're not rich, they're just sort of like working hard. They're earning about above 100 000. Maybe they earn 105, 000 because in their salary job they earn 70 000. And then they did some extra locum and maybe they got some other extra income from the side hustles and they think they're just trying to make all ends meet. They think they've paid their taxes and suddenly they get a letter from hmrc, the notorious brown envelope to say hey you. And then they start sort of running health and skelter. Probably reach out to people like custom money wise doctor or people like you in a CSL accountant to ask for advice. Hopefully they reach out to, to someone who knows what they're talking about. Hopefully you guys. And then they suddenly find themselves owing all this money in taxes because whatever they earned before that was tax free has been pushed into, you know, the taxable income, which further pushes more money into the 45% and pushes like other money that could have been 20. So basically, like, should we just make sure that we don't earn a lot of money or do your best to make sure you don't earn any money at all. Don't work too hard, work a day or two a week. What would you suggest? Let's say a neurosurgeon or even just a GP or a junior doctor, a nurse, maybe they've got a rental property and it all goes into their income. Would you say, okay, don't. Yeah, just be lazy, don't work too hard.

One thing is something, I'm sure we all want more money, so I want to go work for money.

Well, I don't, I don't know if everybody wants more money. Maybe some people just want more peace and they want the world to be a better place.

I won't say, I won't say stop working.

Okay.

We actually need, we actually need, if I will need more doctors.

Okay, okay.

So we can easily reach out to the nhs.

Fair enough, Fair enough.

I won't say stop working. If you can, you can work above, you can work in a unit and above the hundred thousand and still not even avoid the additional tax rate, which is the 45%.

And you can do that, you can do that legally.

Okay, so the UK system, fine, the, the rates, we believe the rate is high, the tax rate is high.

Yes.

But there are also some things that the government has put in place with which you can use to reduce your tax.

Okay, Okay, I, I'm sure we're going to get into the meat of that, those things because those are where we now get into a specialist area. Where, which is why someone like me, I maintain the relationship with accountants for almost, I'll say, all my working life as a doctor, basically, especially in the uk, I'll say whatever fees I've paid to an accountant, I see it as a massive returns on investment for me, basically because of the ad. And that's not because you're my podcast. Obviously most people know these things, but let's go into all that detail. So you could in above hundred thousand and avoid the 60% tax trap. How?

Yeah, there's something called tax three.

Okay.

Tax relief. It just means it's in simple terms you are getting a relief from tax. So it's more like you are not paying the tax. You're supposed to pay.

Yes.

So however, usually the tax will leave legal.

They are all legal.

They are legal. There, there are ways you, there are some things that you do which we'll be getting into. An example of that is the pension.

Okay.

So you can contribute into the pension scheme.

Okay.

And get a relief from the pension scheme.

Okay. Okay.

Now the way the pension works is once you contribute any money to the pension, okay. Depending on your employer or on the, and the scheme, the pension scheme that your employer is registered for.

Yes.

In some cases they deduct the pension after your income has been taxed.

Okay.

If you are earning £1,000, your employer tax to £1,000 to pay in K anythmrc. Okay, let's see, just as an example, let's say on the £1,000 you pay £200 as tax.

Okay.

HMRC. Then the balance of the, the balance £800, your employer deduct pension from that.

Yeah.

As an example.

Okay.

And pay that £100 to the pension provider.

Okay.

Also adds their own contribution, which is the employer contribution.

Yes.

To the pension provider. To the pension for your pension.

Lively. Okay. I think basically because a lot of doctors work for the nhs. What you, what you describe is defined contribution pension where people sort of like pay into their pension and they deducted. A lot of people on the NHS pension are defined benefits where they contribute and the employer contributes. And obviously there's tax relief as well in both cases. But how about, let's say I work in the nhs, I have an NHS pension and I then want to have a private pension as well. Not my workplace pension, something like a sip, like my self invested personal pension. Do I also get tax relief from it as well?

Yes, you get tax relief on that as well. If you contribute a private pension, you still get tax relief on that. However, you need to be mindful of the pension allowance.

How much is that?

So currently it is £60,000. 20, 24, 25 tax year. So you can what that means is your pension pot, all the money that goes into your pension pot should not be more than £60,000 for the year.

Okay.

It is below £60,000. When I say all the money that's total pension, it is not just the one that you are putting into it.

Okay.

Your, your contribution as the employee of the organization or private pension, whichever pension you're using, your employer's contribution that goes into your pension pot.

Yes.

If a family member or anybody just docks money into your pension pot, any money that goes into your pension pot should not be more than the allowance for the year.

Okay, well let's. Let's make it very practical now. Let's say. Let's say I'm a JP and I work in a JP surgery or let's say I'm a hospital consultant and I get a salary and the NHS pays into my energy, my pension. So there's a pension coming from the nhs. But also I work part time as a private practitioner for let's say private healthcare like Northfield or wherever I go there. And I do procedures and they pay me, but they also put some money in my pension. And then also because I want to have a healthy pension port and I don't want to take dances and dependently on my employer, I also have a private pension, let's say a sip and I put some extra money in that pension. So what you're saying is that all of this together in a year again. Taxi. Right. In a taxi. In a taxi. As long as it doesn't exceed. I know it used to be 40 000. As long as it doesn't exceed 60000 then I can get tax relief. So I don't have to pay taxes on that amount. That 60000 or whatever I can put. It's not a must. You must get 60,000, is that, is that correct?

Yes. Well, just to get a fight for that. As long as it is not up to 60 000. Yes. It doesn't mean you don't have to pay tax because obviously your employer would have deducted tax. Okay, go for the. Especially for private pension.

Okay.

For someone.

Yes.

That's taxed. You give you whatever is yet after tax and other deductions.

Yes.

You take out of that money again the money that has been taxed already, you add it to a private pension to work, you already pay tax on it.

Yeah.

You will still be able to claim that relief as long as it is no more than the personal allowance. Then you can do a tax return to claim the additional relief on the pension on the private pension that you've contributed.

Oh, I see. So because my employer automatically taken out my tax, they didn't know I contributed money for. Yeah. So the way for me to get it back would be to do a self assessment to get a return to be able to declare that I paid this extra money in taxes and to be able to get it back. Is that correct?

That's correct.

Right. Okay.

It came in back on your tax return.

Tax return. Very important. I'm going to come back to self assessment because I think it's really quite important. A lot of people miss out self assessment. So I'm going to come back to that. But first let's look at other relief.

Just to have. In case the total pension is not more than 50,000. Yes, you pay tax on it. Also the 60000 allowance at the point it starts reducing as well. So once Your income is above 200000 for the year, then you have to, you would need to. It is better to switch to an accountant, look at what your pension allowance for the year will be.

It's all very complex.

And yes, to write the income I use 200000 to be saved because once it's getting there then it is better to speak to an accountant so they can calculate what your pension allowance will be for the. For the year. So you don't think it is 60,000, you keep contributing and then they tell you, no, it is not that.

Yeah, well, I can tell you for free. I don't know about the rest of the audience, but most of people I know in the audience, they're not worried about contributing more than 60,000 and, and if you're contributing, if you are worried about contributing more than 60,000 to your pension, chat us in the comments, in the YouTube comments and, and let us know what you're doing and how you're managing. But when we say 60,000 just for, for the audience, it doesn't mean you have to contribute 60,000. I end up doing 5,000 or 10,000. But whatever you do, your private pension, you should get a tax relief on it. And how you claim that, especially if you're working as an employee somewhere will be doing a self assessment or tax return. All right, going back to tax relief. For those who have been following this channel, we've got like a free book, a free downloadable guide you can go and download. It's basically how you can get tax relief on professional expenses. We'll put it somewhere in the link in the description, you can download that. But I want to ask the expert here, tax relief, let's say, use me as an example, let's say I'm a doctor and I'm working in an NHS hospital, apart from pension, because some people think, well, I'm not, I've got NHS pension for now, what else can I get tax with this on, let's say professional expenses.

Yes, you can get unprofessional expenses. However, before we talk about that, there is this tax relief that people take for granted, especially with our coming from, let me say from Africa. Yes, like charity. When we don't back home. We pay to our mosque, we pay to our children. That's just money.

Yeah.

In the uk, when you donate money to your church or your mosque, especially if they are registered as a charity in the uk.

Yes.

Any charity that's registered in the uk.

So like right, if I donate to Red Cross, the local kitchen and any sort of charity, including church, mosque, ngo, as long as they are UK registered by the net money to that charity, they qualify for relief.

Yes. As long as they are registered as a youth, as a charity with a charity commission or in Scotland, as long as they get a registered charity in the uk, then you can claim a tax relief from that money. So the way that works is if you don't, and to be honest, there are some people that will tell you, I've talked to some clients, but I told them, see this, the money you've donated to your church, you can actually claim a week on it.

Yes.

Yes, the church, the way it works is this. If I donate one pound to the church, okay. The church will go to HMRC.

Okay.

20. Okay. As gifted, there's something called gift aid.

Gift aid? Yes.

Of that one pound.

Okay.

Now the reason for that is because don't forget the one pound I donated to the church. My employer has already deducted tax on that money. Yes, that one come.

Yes.

The tax that I have paid on that one pound is what the church has gone back to HMRC to collect.

To collect.

Now, if my income is say 50000 for the year, don't forget I'm paying tax at 20.

Yes.

So that way I can't all the tax are paid. The church has been back, so there's nothing left for me. So that way you can't kill tax free on such because you are redeemed quickener. However, if I'm a high retainer, let's say I'm paying tax out.

40. Yes.

The church has only taken. So just to correct why said 25, the church retains 25.

25. Okay.

Yes. So the church has already gone around to it. Oh, I think donated money to us. He donated one pound.

Yeah.

Well, the 25 tax he has paid.

Yes.

No, I've contributed. I actually pay tax of 40% on that money.

Okay.

Church has claimed 25%.

Okay.

Something else. That money that is left is what I can claim on my tax return as a tax relief.

Oh. So the difference between what the church or the charity could have claimed, the 25 and what band I'm being taxed on. For instance, if I'M being taxed on 40, I could then claim the difference, Is that what you're saying?

Yes, but usually it's usually 20 that I can do better on my tax return and go back to HMRC and.

Claim this is too much math. And then again, that's part of why.

I think don't worry about the number. As long as your, your income is more than 52, 70 in a year.

Okay.

And you contribute money to a charity in the uk, okay. You are eligible to get tax relief on that money that you are donated to the charity. All right?

Okay. Latif, I'm going to ask you a key question here. Sorry to jump in because we've got like people from our audience who are from different countries. We have people from Pakistan, Nigeria, India, multiple countries. And we have people from the uk. We are born here as well. And some people ask, what if I give money to somebody? Or like let's say I send money back home to somebody who is struggling and it's all charity. Right. Can I claim it as well? Am I able to claim it?

Yeah, it is charity as you said. However, for hmrc, for tax relief, it is not a charity. The money has to go to a UK registered charity. Not just previously it used to be charity in the euro, but since Brexit. So it has to be a charity that is registered in the uk. That is very important.

Right.

As we said earlier, some people tell you I don't have money back home. We seen several people, they need lot of money back home. However, that money will not qualify just because it is not a uk. And also to note you need to keep record of those donations.

Yes.

What I do advise our clients is that the donation should be coming from your bank account.

Okay.

That way you have a, you have a track record.

Yes.

Of the money actually going to the Chinese. So it is better. Some people tell you just go to church. I put, I'll just give them today, tomorrow. What did I say? The best thing is get, what's it called, do it from your bank account.

Okay.

Any money you want to donate, do it from your bank account.

So there's a paper, there's a paper trail for you. You can, you can do, you can do good and still do well. Just because you're giving the charity doesn't mean you shouldn't be also task wise about it. So you can, can do it. Thankfully, due to Covid, a lot of people now give online and I know we have. I remember four or five years ago when I was in my self assessment and then you guys thankfully helped me with it. And it came out that there was several thousands, not just to local charities and Salvation army and the rest of them, but also to religious bodies and other places where we had supported and we didn't claim any taxes on it. So. But the most important thing that is going to be a UK registered charity and that way you can claim tax relief on it. Okay, that's nice. Now that's one, one way. We've talked about pensions, we've talked about charity. Now the next one, obviously I'll say one big one, which is the one that a lot of us hear about, but not everyone claims is professional expenses. I think, I think we know a little bit about that one. But tell us what, what do you think? What can I claim as a doctor.

Or nurse, As a medical doctor or as a nurse? There are some professional expenses that you can claim on your tax return as an expense. So what those, what those expenses, do they reduce your taxable income? 100,000 in a year and you paid £1,000 as an allowable expense. Okay. Then you can use it. So that means your taxable income for that year will be 99000 instead of 100 000. So the for make for medical practitioners, the common ones. The common professional expenses that you can claim include your subscription. Basically. Let me just use this name, let me just use sentence. As long as the money you are paying, you must make that payment to be able to do your job.

I like the way you put it simply.

Yeah, just like your gmc, there's no way a doctor will be in the uk, practicing in the UK and you do not have a GMC subscription.

Right. So it must be that for you to be able to claim this money, you require that stuff to do your job. Without it, you can't do your job without what they say things like wholly exclusively for your job require the method.

So as long as that professional expense, you need it to be able to do your job, then you can claim it as an expense on your tax return.

I like how simple.

Yeah. Such as your gmc, for example, you have to pay gmc.

Okay, yeah, you have to. And we pay a lot of money to gmc. GMC has had thousands of pounds from my pocket. Well, it's about 400 and something now. Okay. GMC, General Medical Council, I believe nothing. Council as well, therapist, whatever, your council. And then what else for the gmc.

They have to claim that your proportional indemic insurance. Okay, Another thing, you need to notice these expenses if you are claiming them from hmrc, then it should mean that your employer has not refunded you.

Okay. So you can't claim what has been refunded already.

Exactly. Because there are some, there are some employers that will refund you with your gmc, your subscription, so you can't. Or in fact, in some cases, some employer will be the one to pay to make the payments for you. So you can't claim that as an expense.

I like how you're going into all these sort of things that could actually nuance issues that could cause problems because someone can say, I'm going to claim my gmc, but the employer has refunded them that way. It's like double tax relief. Yeah.

Okay.

Oh, you don't want HMRC to knock.

On your door so you can claim your, your Internet insurance as well.

Okay. There's the Royal Colleges, for instance. Member of Royal College. I'll see. Gp, rcgp, Royal College of gp, Royal College of Surgeons. All those walls as well. How about if I buy a stethoscope or replace my stethoscope? Can I claim that as well?

It depends. You know, there are some key thing that your, your employer is supposed to provide this equipment for you.

Yes.

So if, however, if in your contact, if your employer, if you are the one that is supposed to provide such equipment.

Yes.

Then you might be able to claim it as an expense.

Okay.

And also paintings. I know very hard doctors like your training all the time. You can clean, you might be able to clean your cleaning depending on some factors.

Training. You mean like if I attend a course or training program and all that? Okay.

You can claim, you can claim something depending on some conditions. The major one is, you know, there's like a GP training, for example.

Okay.

The contract of employment will require you to do some trainings.

Okay.

For you to proceed in that job.

Yes.

So it's just like if I want to work for you now and you told me, oh, you must do this training.

Yes.

You did not do this training after one year, not going to job for you.

Yeah.

That feeling, that means you as my employer, you have made it mandatory for me to do that thing.

Okay.

You are not refunding the cost of the independence.

Exactly.

In that case, I can claim back the cost of that payment as an expense on my tax account. Okay. It is required for me to do the job and discompose it for me to be able to continue doing that job.

Okay.

It does not mean you have to. You want to do masters in something and I'll say That is just that, just professional training, basically, that are actually required for the job.

So if I go away and do an MBA in healthcare, I'm not gonna get refunded.

Anything, kind of anything can change, you can take until now.

Okay, so let's see. Again, I think it says, even though you define it in a very simple way that most people understand, but hmrc, they use terms like it must be holy exclusively for your job. And it must be reasonable. Right. Necessary and reasonable. So you can't say, I bought a jet so that I can be able to get to work on time or because I have to work somewhere else. I bought, I bought a flying boat. I work in Commonweal and Devon. So I can just zoom off. It must be reasonable.

You can buy your jet, will just tell you your employer is anything you suggest.

So you can, you can't claim it at expense. But who determines what is reasonable? What, what, what is. What does HMRC consider as reasonable?

To Dennis, the word reasonable is relative.

Okay.

To you, it's, can you, you, you might spend 100,000 on a stethoscope.

Okay.

The world's best. And to you it might be now, oh, this equipment to do this. If you do that. That's why I spend that money.

Yes.

Then HMRC can come and tell you why you buy stethoscope of 100,000 when you can buy one for £3,000.

Yes.

So in that case, he knew it invisible. Okay. I won't say the final authority because.

You can still challenge it in court. Yeah.

So to hmr. So it is, it is, it is relating. No, it is relative to you. It's like nobody as an accountant, what we just do is we look at it and look at, say this thing, you want to claim this £1,000 on this.