Dental update: Should dentists be braced for HMRC to tighten the (self-employment) gap?

Published: Friday 10 September 2021

There has been a lot of focus over the last few years on the employment status of self-employed contractors, with the changes to the IR35 regulations and the landmark Uber case earlier this year. 

Dentists have, so far, escaped the scrutiny of an employment status review by HMRC, relying on the standard British Dental Association (BDA) and Dental Practitioners Association (DPA) agreements to ensure the income of dentists practicing as associates is assessable under trading income rules and not as employment income.

HMRC have recently announced that, with effect from April 2023, they will withdraw the paragraph in their guidance which mentions the BDA and DPA standard associate agreements. 

What does this mean for the numerous associate dentists subject to UK tax law?

It does not mean that all associate dentists are suddenly going to be subject to tax and NIC deductions as though they were employees, or that every associate is going to be subject to an HMRC enquiry into their status. This is not a change to the principles of self-employment status, but it does mean that we should not assume that the status quo will prevail. 

It would be prudent to take this opportunity, in advance of April 2023, to review your associate engagements and use HMRC’s CEST toolkit (link below) to make a determination of your associate engagements and review their daily working practices.  We may well see a more formalised requirement for practices to check the employment status of associates.

https://www.gov.uk/guidance/check-employment-status-for-tax

As with the changes to the IR35 rules, HMRC will not be using this change to the guidance as a reason to open up retrospective enquiries into employment status, but associates and those engaging them should ensure that, going forward, all factors are aligned to minimise the risk should HMRC enquire. 

If you have any queries regarding employment status, or would like us to assist with a review for your associate engagements, please do not hesitate to get in touch with a member of the team below. 

Key contacts

James Morter
James Morter
Partner
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Nigel Utting
Nigel Utting
Director
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Katie Williams
Katie Williams
Director
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