Associate Dentists Tax Status

HMRC has announced its withdrawal of guidance with effect from 6 April 2023 in relation to Associate Dentists. Up until now, Associates had always been covered by HMRC Guidance that stated:

‘Associate’ Dentists It should be noted that there are standard forms of agreement for ‘associate’ dentists which have been approved by the British Dental Association (BDA) and the Dental Practitioners Association (DPA). These agreements relate to dentists practising as associates in premises run by another dentist. 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. In these circumstances the dentist is liable for Class 2/4 NICs and not Class 1 NICs.

The NHS General Dental Services Contract, which came into force from 1 April 2006, provides for less fluctuation in Associate Dentist’s income. However, providing the Associate Dentist 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, the above guidance will still apply.

The above guidance for Associate Dentists will be withdrawn with effect from 6 April 2023 and after this date the status of new and ongoing Associate Dentist engagements should be considered in line with ESM0500 and CEST.

This now means that from April 2023, all Associates’ tax status should be considered on a case-by-case basis depending on the circumstances of each individual dental associate.

It is believed that in most cases there will be no change to the self-employed status for the majority of associates. There is a concern for those Associates whose working arrangements are subject to a higher degree of control than normal. Here at Alexander Myerson & Co we are advising Associates and practice owners to go through the online HMRC CEST test, answering all questions carefully and honestly and then retain a hard copy of the conclusions arrived at.

Alexander Myerson & Co are a member of NASDAL, being experienced dental accountants we are in a position to assist and advise dental associates or practice owners who have any queries about the withdrawal of guidance and HMRC’s new approach.

Please contact us for further assistance.