Status symbols in dentistry

It’s not a time to be complacent – review your contracts, working arrangements, and run the CEST tool

21 October, 2021 / professional-focus
 Suzanne Hendrie  

Discussions about whether an Associate Dentist is truly self employed have cropped up many times over the years. HMRC have also undertaken some investigatory ‘fishing trips’ in the recent past in an effort to explore whether they had scope to challenge the customary status of self-employment in the sector.

Given the need to repair the nation’s finances post pandemic, it would be natural to expect that all avenues for increased tax take will be explored going forward.

HMRC recently announced that, with effect from April 6, 2023, the automatic acceptance of self-employed status if the BDA or DPA model contracts were used shall no longer be the default position. This, quite reasonably, has raised anxiety levels in the Scottish Dental Sector. But what is the risk really? 

Our advice is that, in reality nothing, has changed and the employment status of an Associate will be dictated by the ‘on the ground’ relationship between practice and performer. There are a number of status indicators which are used in cases to determine status and precedents set around the valid indicators.

These indicators include the supply of ‘tools of the trade’, choice of delivery method, ability to make a trading loss, ability to send a substitute, etc. Notoriously difficult to be definitive HMRC have provided an online tool (CEST) which can be used to check the current arrangements and give an indicative ruling on status.

HMRC will accept this ruling in a future dispute as long as the questions were answered accurately and truthfully. Importantly, this must reflect the working relationship in place. 

Our recommendation is that you review your contracts, working arrangements, and run the CEST tool on your Associate contract(s) and keep a copy of the ruling safely on file for future. We anticipate more investigatory reviews will emerge from HMRC once their teams are redeployed from the Covid support front line. 

It’s not a time to be complacent and I suggest you tidy up any elements of concern sooner rather than later. If you would like to discuss things free of charge, please do get in touch. Happy to help.

Suzanne Hendrie is Head of Tax at Dental Accountants Scotland.

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