Associates advised to hold steady in face of status review

13 June, 2018 / infocus
 Scottish Dental  

Tax experts are advising dental associates to hold steady as Her Majesty’s Revenue and Customs (HMRC) says it will review their employment status.

Recently, a number of associates have received letters from HMRC stating that a review is under way.

Until now associates have been classed as self-employed. However, following the much-publicised case of Uber drivers being re-categorised as ‘workers’ by HMRC, there has been some confusion over the status of several groups, including associates.

Roy Hogg of Campbell Dallas, an accountants and business advisory company, believes this is simply a drive to increase revenue on the part of HMRC. He said: “This has been rumbling about for many a year, but it’s at the stage where HMRC are going to argue that you (dental associates) are not self-employed, but employees and any remuneration you receive will become subject to employer’s national insurance or national insurance in general.”

He believes this could create a dilemma over who is responsible for any additional contributions due to the Revenue – the associate or the practice principal.

Louise Grant of accountants EQ Healthcare explained that the issue could be further complicated by different cross border ways of operating: “In England, rather than the patient list being held under the individual names of the principal or associate, it’s held under the practice name. I believe the Scottish government is looking to implement the same approach. That means if the patient list is with the practice and not the individual then technically that individual should be an employee of the practice.”

However, since employment law and tax law are different, people could be classed as an employee for tax purposes but lose out on benefits such as holiday pay, sick pay and so on.

Louise has had associates approach her about this issue. She said: “My advice at the moment is that the ultimate decision will have to be made by the principal…and if they make the wrong decision then it’s them as the employer who will be liable for national insurance payments.”

Roy added: “This is very much at the embryonic stage – we don’t know how serious HMRC are.”

He believes there won’t be any immediate impact. “I suspect people will hold their nerve and carry on as they have done for many a year.”

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