Know your employment status

It has become the industry norm that dental professionals, whether it be a dental associate, hygienist or therapist are treated as self employed for tax purposes, and rarely employed. You may ask yourself why this is the case and whether, with the recent legal rulings, this employment status will continue to be accepted by HM Revenue & Customs.

You may be aware of the Uber ruling which decided the employment status of the drivers should move from being treated as self employed to employed. The self employed drivers of Uber were not entitled to, for example, employer pension contributions or holiday entitlement. Uber also saved on Employers Class 1 National Insurance.

On a similar topic, new rules under what’s known as IR35, were introduced from April 2017. These rules are aimed at locum medical professionals taking up work for a public sector, for example, an NHS Trust, using a private limited company. Rather than change their status to being employed by the NHS Trust, HM Revenue & Customs changed their status to ‘off payroll workers’. What this means is that they are taxed through the payroll system but are not entitled to the legal employee benefits like pension contributions or holiday entitlement.

With these changes in mind, you might expect to see a shift in the employment status of dental professionals away from being treated as self employed. However, this is unlikely for dental associates where standard forms of agreements have been approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA). HM Revenue & Customs state in their guidance, “Where these agreements are used and the terms are followed the income of the associate dentist is assessable under trading income rules and not as employment income.”

It is very important that you seek advice about your current workforce arrangements to determine whether their status continues to be accurate following recent changes.

For more information or advice, get in touch with one of our EQ Healthcare team today.