Dentists facing self-employment status changes

Until recently, the tax status of Associate Dentists was covered by a specific concession by HMRC that allowed them to be treated as self-employed for tax purposes.

From April 6 2023, this blanket concession is being withdrawn by HMRC. An individual Associate’s tax status will be determined on a case-by-case basis instead. Until now Associate Dentists engaged under the terms set out within the British Dental Association’s (BDA’s) standard Associate contract and other contracts approved by the Dental Practitioners Association (DPA), were automatically deemed to be self-employed. This will no longer be the case shortly.

So, given the changes from April 6, will the self-employment status change? Will an Associate become an employee of the dental practice moving forward? The answer, unsurprisingly, is not clear. It will depend on the Associate’s individual circumstances, the contract in place with the dental practice and, as important, whether the reality of the working arrangements actually match what the contract says.

What is crucial, however, is that the Associate should now scrutinise their own arrangements with the practice.  This may result in amendments/variations to the existing contract to ensure, or least strengthen, the self-employed status. Hopefully practice owners have already engaged with Associates regarding this change by HMRC but if they haven’t, perhaps the Associate should encourage them to do so.

One of the key factors that form part of determining employment or self-employed status is the element of control. That is control the Associate Dentist has in what they do compared to what control the practice has over the work the Associate carries out. The contract should be clear on this, but it is very important that even if the contract is clear it must equate to the actual working arrangement in the practice. The wording in the contract must be the same as the reality.

Control can be seen in varying formats. The Associate Dentist needs to show they have autonomy to decide their own working arrangements. Can the self-employed dentist engage their own locums to perform the duties instead of them? This is often seen when the Associate Dentist wants to take time off or when they are away from the practice for other reasons. This right to appoint a locum should not be subject to additional restrictions by the practice owner.

So, what is needed now? Discuss with the practice owners and see what they are doing about these changes. HMRC directs dentists to use Check Employment Status For Tax tool (CEST). This is an online status checker that asks certain questions about the working arrangements. Answer the questions accurately and ensure the answers match reality and not just what it says in the Associate contract.

How can we help? We can review your contracts thoroughly, and assist in determining your correct tax status. Contact us if you have any questions regarding changes to the self-employment status of Associate Dentists.

(E) enquiries@advaloremgroup.uk (T) 01908 219100 (W) advaloremgroup.uk