Important Accounting Update for Dental Practice Owners regarding status of ‘Associate Dentists’

Since April 2023, HMRC have adopted a different stance towards the employment status of 'Associate Dentists' that could become very costly for dental practice owners. If you use Associate Dentists or are an Associate Dentist, read this article and seek advice now.

Since April 2023, HMRC have adopted a different stance towards the employment status of ‘Associate Dentists’ that could become very costly for dental practice owners.

Crucially, if your dental practice engages Associate Dentists to deliver your dental services, then we strongly urge you to consider their employment status and to take advice from us if you have any queries.

What is the background to Associate Dentists and HMRC?

For many years there was an informal agreement with HMRC that ‘Associate Dentists’, that is, dentists practising as an associate in another dentist’s practice, can be treated as self-employed.

This agreement was based on there being a standard form of agreement that had been approved by the Dental Practitioners Association (DPA) and the British Dental Association (BDA).

If the terms of these agreements were followed then the Associate Dentist was treated as being self-employed and they would pay tax based on their trading income, not employment income.

What changed in April 2023?

In a big change, from April 2023, this guidance has been withdrawn by HMRC.

Usual case law will now determine the employment status of each Associate Dentist.

The strong implication being that many more Associate Dentists will now be treated as employed by the dental practice rather than self-employed.

HMRC have a “Check Employment Status for Tax” (CEST) tool to use to determine whether an Associate Dentist should be classed as employed or self-employed for tax purposes.

Why did HMRC make this change to the previous arrangement?

During the pandemic, some dental practices claimed furlough payments for their Associate Dentists as employees. The revenue have decided that their status cannot now be changed back to self-employed.

What are the implications for the owners of dental practices?

If HMRC choose to challenge the classification of an Associate Dentist on the basis that they now believe them to be employed, not self-employed, then they will contact the dental practice as the employer.  

Crucially, if the challenge is successful, the dental practice could be liable for employer’s NIC payments and the income tax of all of their Associate Dentists which could be very costly.

Currently, HMRC have not said whether there will be an amnesty on historical cases, but if not, they could go back four to six years for each Associate Dentist, at each dental practice.

When looking back historically, there may be an offset for the taxes that have already been paid by the Associate Dentists as self-employed, but the dental practice could be liable for at least the employer’s National Insurance Contributions at 13.8%.

How will HMRC decide if an Associate Dentist is employed or self-employed?

Usual case law will now determine the employment status of each Associate Dentist. When determining if an Associate Dentist is an employee, or self-employed, HMRC will look at various factors including (but not limited to):

  • Is the Associate Dentist required to carry personal professional indemnity insurance and are they expected to indemnify the dental practice against any claims in respect of their treatment of patients?
  • Are the Associate Dentists free to work at the practice for as few or as many hours as they wish?
  • Are they free to work for other dental practices?
  • Are the Associate Dentists responsible for their own tax and National Insurance Contributions?
  • Are the Associate Dentists subject to the same disciplinary or grievance procedure as employees?
  • Do the Associate Dentists have their own office/consultation room at the practice?
  • Are the Associate Dentists entitled to holiday or sick pay subject to the terms of their employment or according to statutory rules?

What should Dental Practice Owners and Associate Dentists do now?

As a dental practice owner, if you use Associate Dentists in your dental practice, contact our accounting experts for more information about the changes. We will discuss your specific situation and advise you of the best course of action.

As we’ve stated, if your Associate Dentists are deemed to be employed, you could become liable for employer’s NICs and the income tax of all of your Associate Dentists going back 6 years which could become very costly if you engage many Associate Dentists.

Call us on 0161 249 5040, or email: without delay.

What if you are an Associate Dentist in a dental practice?

Equally, if you are an Associate dentist and are concerned about the effects of these changes on your employment status – and the implications on your tax payments – then contact our accounting team at Leonherman.

Call us on 0161 249 5040, or email:

Important Disclaimer

This material is published for client information. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. No responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by Leonherman.

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