HMRC Investigates Dental Associates

Recently, HMRC has been sending out letters to associate dentists notifying them of its intention to review their employment status for tax purposes.  If the Revenue decides that associates are not independent contractors but employees, dental practices would be required to start paying National Insurance Contributions (NICs).

HMRC considers the majority of associate dentists to be self employed. Its updated Employment Status Manual states an associate will not be considered an employee providing the dental associate “continues to be responsible for paying their share of laboratory fees etc for work relating to their patients and other terms of the standard agreement are followed."

However, the reason for the HMRC investigation appears to be in determining the classification of the employment status of dental associates in its guidance with that stated in the Standard General Dental Services Contract which is based on the National Health Service Act 2006 and introduced in the same year.

It is therefore important that dental practices review the contracts of associates to ensure they are up to date and that the associate is adhering to the contract.  Should their associates be classified as employees, dental principals would be required to pay employers NICs at 13.8%, as well as statutory holiday and sick pay and provide a workplace pension scheme.

The BDA is currently collecting evidence on behalf of all dentists to try and gain a picture of what information is being gathered.  

We recommend that if you receive a letter, that you contact your accountant straight away.



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REF: MC/NL/1.1